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McGlinchey Stafford PLLC in AL, FL, LA, MS, NY, OH, TX, and DC. McGlinchey Stafford LLP in CA. Page 1 of 1 · mcglinchey.com
Real Property and Business Litigation Report
Volume X, Issue 33 August 22, 2017 Manuel Farach
Bivens v. Bank of America, N.A., Case No. 16-15119 (11th Cir. 2017). Failing to timely respond to a borrower’s Qualified Written Request (“QWR”) under 12 U.S.C. § 2605(e) is not a violation of the Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq., if the borrower sends his QWR to an address other than the one the servicer designates to receive QWRs.
Platinum Luxury Auctions, LLC v. Concierge Auctions, LLC, Case No. 3D16-1958 (Fla. 3d DCA 2017). A settlement agreement with a confidentiality and non-disparagement provision does not require the removal from a website those disparaging remarks existing on the website both before and after the parties entered into the settlement agreement.
New Day Miami, LLC v. Beach Developers, LLC, Case No. 3D17-1071 (Fla. 3d DCA 2017). An order on a Florida Rule of Civil Procedure 1.540 motion may be an appealable final order, but a motion for rehearing directed to the order does not toll appellate time periods due to Florida Rule of Appellate Procedure 9.130(a)(5) which holds that “[m]otions for rehearing directed to these orders will not toll the time for filing a notice of appeal.”
The Warwick Corporation v. Turetsky, Case No. 4D16-256 (Fla. 4th DCA 2017). A court may refer to an instrument incorporated by reference into a contract to determine whether the contract is ambiguous.
Nationstar Mortgage, LLC v. Chan, Case No. 5D16-3492 (Fla. 5th DCA 2017). The Fifth District joins the Second and Fourth Districts in holding that a party substituting for a plaintiff that had standing at inception gains the same standing.
© 2017 Manuel Farach
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 16-15119 ________________________
D.C. Docket No. 1:14-cv-01569-ODE
STEVEN BIVENS,
Plaintiff - Appellant,
versus
BANK OF AMERICA, N.A.
Defendants,
SELECT PORTFOLIO SERVICING, INC.,
Defendant - Appellee.
________________________
Appeal from the United States District Court for the Northern District of Georgia
________________________
(August 17, 2017)
Before MARTIN, JILL PRYOR, and ANDERSON, Circuit Judges.
JILL PRYOR, Circuit Judge:
Case: 16-15119 Date Filed: 08/17/2017 Page: 1 of 11
2
Out of the blue, Steven Bivens received a letter from Select Portfolio
Servicing, Inc. (“SPS”), a company with which he had had no prior dealings that
purported to be his home loan servicer. Skeptical, Bivens wrote SPS a letter
demanding proof of its authority to service his loan. He neglected, though, to mail
his letter to the address SPS had designated for receiving such correspondence.
When SPS failed to provide the proof that Bivens had requested, he sued SPS for
damages under the Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq.
(“RESPA”). 12 U.S.C. § 2605(e). The district court concluded that because a
regulation then in effect required Bivens to send his letter to SPS’s designated
address to trigger its duty to respond, SPS was entitled to summary judgment.
After careful consideration and with the benefit of oral argument, we affirm.
I. FACTS
In 2006, Bivens borrowed money from Mortgage Lenders Network to
purchase a home. After a few years, he stopped paying the mortgage. On
December 4, 2012, SPS sent Bivens a letter announcing that Bank of America had
assigned it the servicing rights to his mortgage. The letter provided Bivens with
three separate addresses to use for correspondence—one for General
Correspondence, one for Disputes/Inquiries, and one for Payment Remittance. The
otherwise identical addresses had different post office box numbers. SPS’s letter
explained:
Case: 16-15119 Date Filed: 08/17/2017 Page: 2 of 11
3
If you wish to send a written request about your account or dispute any of the information on this statement, please do not include it with your monthly payment. All written requests must be sent to the address listed below for Disputes/Inquiries, as this is our exclusive address for processing these matters. If you send your request or dispute to any other address, it may not be processed in accordance with our Customer Service Timelines.
December 4 Letter at 2 (Doc. 89-3 at 69.) 1
Bivens, through his attorney, responded by sending a letter to SPS’s General
Correspondence address, not its Disputes/Inquiries address. In the letter, Bivens
stated, “It is my understanding that [SPS] . . . is now going to be the servicer of
[my] loan.” December 17, 2012 Letter at 1 (Doc. 90-6). He asserted that he “d[id]
not believe SPS ha[d] the standing to enforce this obligation” and asked SPS to
“fully identify the owner of the loan by name, address and phone number.” Id. at
3-4. He also requested from SPS “a certified copy of [his] promissory note in its
current condition showing all endorsements and/or any allonge that show that the
purported ‘owner’ of the loan maintains legal ‘holder in due course’ status as of
today’s date.” Id. at 4. Bivens designated his letter as a “qualified written request”
(“QWR”) under RESPA, 12 U.S.C. § 2605(e).
SPS received Bivens’s letter at its General Correspondence address and
forwarded it to its Disputes/Inquiries department. It sent Bivens two letters in
response to his letter. SPS’s first letter identified the holder of Bivens’s note as
1 Unless otherwise specified, citations to “Doc. _” refer to numbered entries on the district court docket.
Case: 16-15119 Date Filed: 08/17/2017 Page: 3 of 11
4
Wells Fargo Bank, N.A., as Trustee, in Trust for SASCO 2007-MLN1 Trust Fund.
Its second letter informed Bivens that he had mailed his letter to the wrong address,
and once again provided him with its Disputes/Inquiries address. SPS did not,
however, timely provide Bivens a certified copy of his note in its current condition,
as he had requested.
Bivens sued SPS in the district court, alleging that he was entitled to actual
and statutory damages based on SPS’s failure to provide an appropriate response to
his letter, which he claimed qualified as a QWR under RESPA.2 SPS moved for
summary judgment on the grounds that (1) Bivens’s letter was not a QWR because
he had not sought information regarding the servicing of his loan; (2) SPS’s
acknowledgment and response obligations under RESPA were not triggered
because Bivens failed to mail his letter to the correct address; and (3) Bivens could
not prove actual damages or recover statutory damages. The district court granted
SPS summary judgment, determining, among other things, that SPS had no duty to
respond because Bivens had mailed his QWR to the wrong address. Bivens timely
appealed.
II. STANDARD OF REVIEW
2 Bivens also brought claims against two other entities, but the district court dismissed
these claims for failure to state a claim. On appeal, Bivens does not challenge the dismissal of his claims against the other defendants.
Case: 16-15119 Date Filed: 08/17/2017 Page: 4 of 11
5
A litigant is entitled to summary judgment if it shows there is no genuine
dispute as to any material fact and that it is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a). We review summary judgment decisions de novo, drawing
all reasonable inferences and reviewing all evidence in the light most favorable to
the nonmoving party. Likes v. DHL Express (USA), Inc., 787 F.3d 1096, 1098
(11th Cir. 2015). “An agency’s interpretation of its own regulations is ‘controlling
unless plainly erroneous or inconsistent with the regulation.’” Sierra Club v.
Johnson, 436 F.3d 1269, 1274 (11th Cir. 2006) (quoting Auer v. Robbins, 519 U.S.
452, 461 (1997)).
III. ANALYSIS
RESPA is a consumer protection statute that imposes a duty on servicers of
mortgage loans to acknowledge and respond to inquiries from borrowers. See
12 U.S.C. § 2605(e); Freeman v. Quicken Loans, 132 S. Ct. 2034, 2038 (2012).
When a borrower submits a QWR—written correspondence that includes the
borrower’s name and account and sufficient detail about the information sought—
the servicer must provide “a written response acknowledging receipt of the
correspondence” and take certain other responsive actions within specified time
periods. 12 U.S.C. § 2605(e)(1)(A), (e)(1)(B), (e)(2).
RESPA originally authorized the Secretary of the Department of Housing
and Urban Development “to prescribe such rules and regulations” and “make such
Case: 16-15119 Date Filed: 08/17/2017 Page: 5 of 11
6
interpretations . . . as may be necessary to achieve [the statute’s] purposes.” 12
U.S.C. § 2617 (repealed 2011). Under this authority, the Secretary promulgated
Regulation X, 24 C.F.R. § 3500.21 (repealed 2014), RESPA’s primary
implementing regulation. See Lage v. Ocwen Loan Servicing LLC, 839 F.3d 1003,
1005 (11th Cir. 2016). Section 3500.21(e)(1), among other things, authorized
servicers to “establish a separate and exclusive office and address for the receipt
and handling of qualified written requests.” 24 C.F.R. § 3500.21(e)(1).3 The final
rulemaking notice from the Secretary explained that if a servicer established a
designated address for receiving QWRs, “then the borrower must deliver its
request to that office in order for the inquiry to be a ‘qualified written request.’”
Real Estate Settlement Procedures Act, Section 6, Transfer of Servicing of
Mortgage Loans (Regulation X), 59 Fed. Reg. 65,442, 65,446 (Dec. 19, 1994).
The district court held that because Bivens had not mailed his QWR to the
appropriate address, SPS had no duty to respond to it. Bivens argues Regulation X
did not apply to his QWR because SPS (1) did not properly designate an exclusive
address for receipt of QWRs and (2) processed both QWRs and other types of
3 The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”)
transferred the Secretary’s rulemaking authority to the newly-created Consumer Financial Protection Bureau (“CFPB”). Pub. L. No. 111-203, § 1098, 124 Stat. 1376, 2104 (2010). Consistent with this provision of Dodd-Frank, the Secretary rescinded the version of Regulation X at issue in this case. Removal of Regulations Transferred to the Consumer Financial Protection Bureau, 79 Fed. Reg. 34,224, 34,224-25 (June 16, 2014). CFPB then promulgated a new version of Regulation X, which, like its predecessor, allows a servicer to direct borrowers to mail QWRs to a designated address. 12 C.F.R. §§ 1024.35(c), 1024.36(b).
Case: 16-15119 Date Filed: 08/17/2017 Page: 6 of 11
7
correspondence at the same office. We conclude, however, that SPS properly
designated an exclusive address for receiving QWRs and that the regulation did not
require SPS to use that office solely for the purpose of processing QWRs. The
district court did not err, then, in granting summary judgment to SPS.
The Secretary’s construction of § 3500.21(e)(1) was neither “plainly
erroneous [n]or inconsistent with the regulation.” Sierra Club, 436 F.3d at 1274
(internal quotation marks omitted). To the contrary, common sense suggests that if
a servicer may designate an address for receiving QWRs, it may require borrowers
to send QWRs to that address in order to receive a response. We thus accord
authoritative weight to the Secretary’s construction of § 3500.21(e)(1). If a
servicer designates a particular address for receiving QWRs, Regulation X requires
a borrower to mail a QWR to that address to trigger the servicer’s duty to respond.4
Bivens argues that he was not required to deliver his letter to the address for
Disputes/Inquiries for it to qualify as a QWR because SPS failed to establish a
designated address for receiving QWRs. He contends that SPS designated no such
4 The Second and Tenth Circuits have reached the same conclusion, albeit for a different
reason. See Roth v. CitiMortgage Inc., 756 F.3d 178, 181-82 (2d Cir. 2014) (“[F]ailure to send the request to the designated address does not trigger the servicer’s duties under RESPA” (alterations omitted)); Berneike v. CitiMortgage, Inc., 708 F.3d 1141, 1149 (10th Cir. 2013) (“Receipt at the designated address is necessary to trigger RESPA duties.”). Roth and Berneike each held that Regulation X permissibly construed RESPA. See Roth, 756 F.3d at 182; Berneike, 708 F.3d at 1148. Without disputing that conclusion, we decline to follow Roth and Berneike’s analysis here because we believe that the relevant issue is not whether the Secretary permissibly construed RESPA, but whether he permissibly construed Regulation X, which requires a different analysis. Compare Auer, 519 U.S. at 461, and Sierra Club, 436 F.3d at 1274, with Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-44 (1984).
Case: 16-15119 Date Filed: 08/17/2017 Page: 7 of 11
8
address because it never (1) identified an address for QWRs specifically or (2)
established an office solely to process QWRs. We conclude that SPS properly
designated an address for receiving QWRs and that its use of that address for
additional purposes is of no moment.
First, Bivens argues that SPS failed to designate an address for receiving
QWRs because it provided him with an address only for “written requests.” SPS’s
letter to Bivens said, “All written requests must be sent to the address listed below
for Disputes/Inquiries, as this is our exclusive address for processing these
matters.” December 4 Letter (Doc. 88-2 at 82). Bivens contends that § 3500.21
required SPS to use the term “qualified written requests”; designating an address
merely for written requests, he says, did not suffice. We disagree.
By directing borrowers to send all written requests to the specified address,
SPS necessarily directed them to send “qualified” written requests to that address.
Its notice used more accessible language than Regulation X required: borrowers
likely would be more familiar with the lay terms “disputes,” “inquiries,” and
“written requests” than with the statutory term of art, “qualified written request.”
24 C.F.R. § 3500.21(e)(1). SPS subjected itself to the administrative burden of
evaluating and prioritizing a larger quantity of mail to identify QWRs, perhaps so
as to minimize consumer confusion. To penalize it for doing so would be perverse.
This is not to suggest that a servicer may designate an address for QWRs using
Case: 16-15119 Date Filed: 08/17/2017 Page: 8 of 11
9
terminology so general or vague that it would fail to put a lay borrower on notice
that the address was intended for QWRs. A servicer’s designation of an exclusive
address for QWRs must be clear to a reasonable borrower—to say otherwise would
frustrate RESPA’s consumer-protection purpose. See Renfroe v. Nationstar
Mortg., LLC, 822 F.3d 1241, 1244 (11th Cir. 2016) (“RESPA, as a remedial
consumer-protection statute, should be construed liberally in order to best serve
Congress’s intent.”). We have little difficulty, however, concluding that SPS’s
designation of an address for “written requests” satisfied that standard.
Second, Bivens argues that SPS failed to “establish a separate and exclusive
office,” id., for processing QWRs because it processed both QWRs and other
correspondence at the same office.5 We construe “[r]egulations with a common
sense regard for regulatory purposes and plain meaning.” United States v.
Fuentes-Coba, 738 F.2d 1191, 1195 (11th Cir. 1984) (internal quotation marks
omitted). Bivens’s construction of § 3500.21(e)(1) would frustrate, not serve, its
purpose. Section 3500.21(e)(1) was designed to help servicers timely respond to
QWRs by enabling them to more easily identify and prioritize correspondence that
purport to be QWRs. See Roth, 756 F.3d at 181 (“To aid servicers with th[e] task
of providing consumers with timely information, RESPA’s implementing
regulations allow (but do not require) servicers to establish a designated address
5 SPS does not dispute that it processed QWRs and other correspondences at the same office using the same staff.
Case: 16-15119 Date Filed: 08/17/2017 Page: 9 of 11
10
for QWRs.”); 59 Fed. Reg. at 65,446 (“This rule does not require that a servicer
establish an office to handle borrowers’ complaints. It does, however, allow the
servicer to do so.”). Allowing a servicer to designate a specific mailing address for
QWR receipt at a common mail processing facility would enable its employees to
easily identify purported QWRs by the address they bear. In contrast, requiring a
servicer to maintain a separate office for the sole function of processing QWRs
would impose high costs on the servicer while providing little benefit. Bivens
notes that employees at a QWR-only processing facility could receive specialized
training for responding to QWRs, but a servicer could just as easily provide such
training to employees at a common mail processing facility. We thus reject
Bivens’s argument that to “establish a separate and exclusive office,” a servicer
must devote an office to the “separate and exclusive” purpose of QWR processing.
24 C.F.R. § 3500.21(e)(1).
Section 3500.21(e)(1) is more sensibly construed to authorize a servicer to
designate a particular office—“separate” from any other office it may have—as its
“exclusive” office for receiving QWRs, without regard to any other function that
office serves. Id. Such a construction accords with § 3500.21(e)(1)’s text and
purpose. We conclude that SPS successfully invoked § 3500.21(e)(1) by directing
borrowers to mail QWRs to a particular office, even though it used that office for
other purposes as well.
Case: 16-15119 Date Filed: 08/17/2017 Page: 10 of 11
11
Because Bivens failed to address his QWR to SPS’s designated address for
QWR receipt, SPS had no duty to respond to it. Thus, the district court did not err
in granting summary judgment to SPS. 6
IV. CONCLUSION
We affirm the district court’s grant of summary judgment.
AFFIRMED.
6 Because we conclude that SPS had no duty to respond to Bivens’s letter, we need not
decide whether (1) the information that Bivens sought “relat[ed] to the servicing of [his] loan,” as RESPA requires, 12 U.S.C. § 2605(e)(1)(A); (2) SPS’s failure to send Bivens the information he had requested caused him to suffer damages, see Renfroe, 822 F.3d at 1246 (“[D]amages are an essential element in pleading a RESPA claim.”); or (3) the district court erred by assuming that SPS was Bivens’s servicer.
Bivens also raises several arguments on appeal related to the district court’s discovery orders. “[W]e will not overturn discovery rulings unless it is shown that the District Court’s ruling resulted in substantial harm to the appellant’s case.” Iraola & CIA, S.A. v. Kimberly-Clark Corp., 325 F.3d 1274, 1286 (11th Cir. 2003) (internal quotation marks omitted). Bivens makes no meritorious argument that the district court’s orders disposing of his discovery motions resulted in any prejudice to his case. Those orders are thus AFFIRMED.
Case: 16-15119 Date Filed: 08/17/2017 Page: 11 of 11
IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED NATIONSTAR MORTGAGE, LLC, Appellant, v. Case No. 5D16-3492
BO CHAN, Appellee. ________________________________/ Opinion filed August 18, 2017 Appeal from the Circuit Court for Seminole County, Robert J. Pleus, Jr., Senior Judge.
Nancy M. Wallace, of Akerman LLP, Tallahassee, William Heller, of Akerman LLP, Fort Lauderdale, and Scott R. Stengel, of Akerman LLP, Orlando, for Appellant.
Kelley A. Bosecker, St. Petersburg, for Appellee.
PER CURIAM. Nationstar Mortgage, LLC, (“Appellant”) appeals the trial court’s involuntary
dismissal of its action for foreclosure of a promissory note and mortgage at the close of
its case-in-chief during trial. We reverse.
The case began when the original lender, Bank of America, N.A., filed a one-count
complaint against the Appellee and her husband to foreclose on the note and mortgage
2
that it held on Appellee’s real property.1 Bank of America alleged that although it was no
longer the owner of the note, it was the holder of the note and servicer of the loan, and it
attached to its complaint a copy of the note and mortgage, with the note containing a
blank indorsement. Sometime thereafter, Bank of America filed the original note with this
same blank indorsement with the clerk of court together with a certified copy of the
mortgage, where they remained at the time of trial. Bank of America later moved to
amend its complaint to substitute Appellant as the party-plaintiff, alleging that the note
and mortgage had been assigned to Appellant and that, as the holder, Appellant was now
entitled to enforce the note and mortgage. The motion was granted without objection.
At trial, Appellant moved the original note and the certified copy of the mortgage,
that had previously been filed with the court, into evidence without objection. Appellant
also moved into evidence the demand letter sent pursuant to paragraph 22 of the
mortgage and its payment history records establishing Appellee’s default on the note and
mortgage. After Appellant concluded the presentation of its evidence and rested its case,
Appellee moved for an involuntary dismissal. The trial court granted Appellee’s motion
to dismiss, but it did so for reasons wholly unrelated to those argued by Appellee. The
court found that Appellant failed to establish standing at the time suit was filed, and it
thereafter entered the final order of dismissal now on appeal.
“We apply a de novo standard of review in determining whether a party has
standing to bring an action.” U.S. Bank Nat’l Ass’n v. Laird, 200 So. 3d 176, 177 (Fla. 5th
DCA 2016) (citing Boyd v. Wells Fargo Bank, N.A., 143 So. 3d 1128, 1129 (Fla. 4th DCA
1 Appellee’s husband passed away during the litigation below and was dropped as
a party.
3
2014)). “A party seeking foreclosure has the burden to establish that it had standing at
the time it filed the foreclosure complaint.” Id. (citing Boyd, 143 So. 3d at 1129).
Here, Appellant was not the original plaintiff; however, as the substitute plaintiff,
Appellant “stands in the shoes of the original plaintiff/mortgagee,” Sandefur v. RVS
Capital, LLC, 183 So. 3d 1258, 1260 (Fla. 4th DCA 2016) (quoting Miller v. Kondaur
Capital Corp., 91 So. 3d 218, 219 (Fla. 4th DCA 2012)), and “acquires the standing (if
any) of the original plaintiff at the time the case was filed.” Id. (citing Lewis v. J.P. Morgan
Chase Bank, 138 So. 3d 1212, 1213 (Fla. 4th DCA 2014)). In the instant case, the original
plaintiff filed with the court the original note, with a blank indorsement, that was in the
same condition as the copy that it attached to the initial complaint. This is sufficient to
establish that the original plaintiff had standing to bring the foreclosure action, absent any
evidence or testimony to the contrary (which there was none). Thus, the trial court erred
in holding that Appellant, as the substituted plaintiff, failed to establish standing at the
time suit was filed. See Ortiz v. PNC Bank, Nat’l Ass’n, 188 So. 3d 923, 925 (Fla. 4th DCA
2016); Clay Cty. Land Trust No. 08-04-25-0078-014-27 v. JPMorgan Chase Bank, Nat’l
Ass’n, 152 So. 3d 83, 85 (Fla. 1st DCA 2014). Finally, we reject, without further comment,
the remaining grounds asserted by Appellee for affirmance.
Accordingly, because Appellant had established standing at the inception of the
suit, we reverse the order of involuntary dismissal and remand this case for a new trial.
REVERSED and REMANDED. COHEN, C.J., SAWAYA and LAMBERT, JJ., concur.
Third District Court of AppealState of Florida
Opinion filed August 16, 2017.Not final until disposition of timely filed motion for rehearing.
________________
No. 3D17-1071Lower Tribunal No. 15-9283
________________
New Day Miami, LLC,Appellant,
vs.
Beach Developers, LLC, et al.,Appellees.
An Appeal from the Circuit Court for Miami-Dade County, Eric William Hendon, Judge.
Richard L. Barbara, P.A., and Richard L. Barbara, for appellant.
Law Offices of Robert P. Frankel, P.A., and Robert P. Frankel (Plantation), for appellee Beach Developers, LLC; Russell A. Cohen, P.A., and Russell A. Cohen; Tables Law Group, P.A., and Ryan Tables (Hollywood), for appellee Brepega, LLC.
Before ROTHENBERG, C.J., and SCALES and LUCK, JJ.
SCALES, J.
On Motion for Reconsideration
I. Relevant Procedural Background
The circuit court entered a final judgment of foreclosure on October 4, 2016,
in the case of Beach Developers, LLC v. Brepega, LLC, lower tribunal case
number 15-9283. Appellant New Day Miami, LLC (“NDM”) was the successful
bidder at a November 17, 2016 foreclosure sale. Two of the named defendants1 in
the foreclosure action moved, pursuant to Florida Rule of Civil Procedure 1.540, to
vacate the October 4, 2016 judgment of foreclosure and to set aside the sale to
NDM.2
On March 10, 2017, the trial court entered an order granting these two
defendants’ rule 1.540 motion, thus vacating the judgment and setting aside the
sale to NDM. Rather than appealing this March 10, 2017 order, NDM filed a
motion for rehearing pursuant to rule 1.530. On April 17, 2017, the trial court
denied NDM’s motion for rehearing, and NDM filed its notice of appeal in this
Court on May 9, 2017, challenging both the March 10, 2017 order and the April
17, 2017 order denying rehearing.
1 These two named defendants are Brepega, LLC and Josemar Francisco. While the purpose of their motion to vacate the foreclosure judgment is not immediately relevant to the issues discussed in this opinion, the lower court docket reveals that their motion was based on their not having received notice of hearing of the final judgment, which deprived them of the opportunity to argue to the trial court that the plaintiff allegedly had breached a settlement agreement.
2 Sometime prior to the February 27, 2016 hearing on the rule 1.540 motion, NDM intervened in the case below, and the record suggests that NDM participated in the hearing.
2
Appellee, plaintiff below, Beach Developers, LLC moved to dismiss NDM’s
appeal as untimely. Beach Developers argued that, pursuant to the express
provisions of Florida Rule of Appellate Procedure 9.130(a)(5),3 NDM’s rule 1.530
motion for rehearing did not toll the rendition date of the trial court’s March 10,
2017 order granting the rule 1.540 motion; and therefore, NDM’s May 9, 2017
notice of appeal was untimely as it was not filed within thirty days of rendition as
required by Florida Rule of Appellate Procedure 9.130(b).
NDM did not respond to Beach Developers’s motion to dismiss, and on June
9, 2017, we granted the motion and dismissed NDM’s appeal. NDM then filed
with this Court the instant motion for reconsideration. In the instant motion, NDM
argues that the trial court’s March 10, 2017 order – vacating the foreclosure sale
and setting aside NDM’s certificate of title – constituted a final judgment as to
NDM, despite being manifested in a rule 1.540 order. NDM maintains that,
because it was a third-party bidder at the foreclosure sale, rather than a party to the
underlying foreclosure action, NDM’s motion for rehearing of the March 10, 2017
order was both timely and authorized, thereby delaying “rendition” of the March
10, 2017 order until NDM’s rehearing motion was adjudicated on April 17, 2017.
3 Rule 9.130(a)(5) provides: “Orders entered on an authorized and timely motion for relief from judgment are reviewable by the method prescribed by this rule. Motions for rehearing directed to these orders will not toll the time for filing a notice of appeal.” (Emphasis added).
3
Fla. R. App. P. 9.020(i)(1).4 NDM argues that its May 9, 2017 notice of appeal is
therefore timely, and adequately invokes this Court’s jurisdiction to review both (i)
the March 10, 2017 order, and (ii) the April 17, 2017 order denying NDM’s
rehearing motion.
II. Analysis
A. March 10, 2017 Order on Rule 1.540 Motion
We are not unsympathetic to the peculiar situation in which NDM finds
itself. We agree that the March 10, 2017 order is “final” as to NDM. While this
order has reopened the underlying foreclosure case, which remains to be litigated,
no further adjudication remains with regard to NDM in this case. See Miami-Dade
Water & Sewer Auth. v. Metro. Dade Cty., 469 So. 2d 813, 814 (Fla. 3d DCA
1985) (“In determining the finality of an order, judgment, or decree, the test
employed by the appellate court is whether the order appealed constitutes an end to
judicial labor in the trial court, and nothing further remains to be done to terminate
the dispute between the parties directly affected.”). We also agree with NDM that,
4 Rule 9.020(i)(1) provides, in relevant part, as follows: “An order is rendered when a signed, written order is filed with the clerk of the lower tribunal. However unless another applicable rule of procedure specifically provides to the contrary . . . if a final order has been entered and there has been filed in the lower tribunal an authorized and timely motion for . . . rehearing . . . the following exceptions apply: (1) If such a motion or motions have been filed, the final order shall not be deemed rendered as to any existing party until the filing of a signed, written order disposing of the last of such motions.” (Emphasis added).
4
generally, pursuant to rule 9.020(i)(1), an authorized and timely motion seeking
relief from a final order delays rendition of the final order until the rehearing
motion can be adjudicated. Yet, rule 9.020(i)’s tolling provision is applicable
“unless another rule of procedure specifically provides to the contrary.” Fla. R.
App. P. 9.020(i). Rule 9.130(a)(5) expressly provides that rehearing motions
directed toward orders on motions seeking relief from judgment do not toll the
rendition of such orders.
In the instant motion, NDM argues that it is somewhat arbitrary that NDM’s
rehearing motion would not delay rendition of the March 10, 2017 “final order”
simply because this March 10, 2017 “final order” happens to be manifested in an
order entered “on an authorized and timely motion for relief from judgment” so as
to bring it within the scope of rule 9.130(a)(5)’s express tolling prohibition. In
sum, NDM argues that rule 9.130(a)(5)’s tolling provision should be inapplicable
to NDM’s appeal because the trial court’s March 10, 2017 order is “final” as to
NDM and rule 9.130(a) is applicable only to non-final orders.
The plain and unambiguous language of the relevant provision of rule 9.130,
however, belies NDM’s argument.5 Rule 9.130(a)(5) expressly governs procedures
5 Indeed, the title of rule 9.130 indicates that the rule applies to some species of final orders: Proceedings to Review Non-Final Orders and Specified Final Orders. (Emphasis added). Prior to the 2008 amendment of rule 9.130(a)(5), the rule specifically identified those orders on expressly scheduled post-judgment motions, such as orders on rule 1.540 orders, to which rule 9.130’s appellate procedures applied. The 2008 amendment replaced the specific reference to those
5
applicable to “[o]rders entered on an authorized and timely motion for relief from
judgment.” The rule is thus applicable to all orders granting or denying a party’s
rule 1.540 motion, irrespective of whether the order is “final” or “non-final.”6
It is not disputed that the March 10, 2017 order challenged by NDM is an
order entered on an authorized and timely motion seeking relief from the October
4, 2016 final foreclosure judgment. As such, the plain and unambiguous text of
rule 9.130(a)(5)’s second sentence provides that NDM’s motion seeking rehearing
of the March 10, 2017 order did “not toll the time for filing a notice of appeal” of
that March 10, 2017 trial court order.
Thus, absent tolling, in order for this Court to have jurisdiction to review the
March 10, 2017 order, NDM was required to file its notice of appeal within thirty
post-decretal motions with “Orders entered on an authorized and timely motion for relief from judgment . . .” Yet, the Court did not amend the rule’s title’s reference to “specified final orders.” See In Re Amendments to Fla. Rules of Appellate Procedure, 2 So. 3d 89 (Fla. 2008).
6 An order on a party’s rule 1.540 motion seeking relief from judgment may be final or non-final. Such an order granting a party’s rule 1.540 motion seeking relief from a judgment may be “non-final” if it vacates a judgment, i.e., the adjudication of the parties’ dispute continues. Conversely, a trial court’s denial of such a motion may be “final,” i.e., the previously entered judgment remains undisturbed. Under the unique procedural posture of the instant case, the trial court’s granting of the rule 1.540 motion is non-final as to the parties involved in the foreclosure (it vacates the judgment allowing the underlying foreclosure action to proceed), but final as to NDM (it vacates the foreclosure sale of the property to NDM). Rule 9.130(a)(5)’s tolling prohibition applies to all orders on rule 1.540 motions, whether the motion is granted or denied, and whether the effect of the order on the appellant is final or non-final.
6
days of March 10, 2017. Fla. R. App. P. 9.110(b). Because NDM’s notice of
appeal was not filed until May 9, 2017, we lack jurisdiction to review the trial
court’s March 10, 2017 order. Peltz v. Dist. Ct. of Appeal, Third Dist., 605 So. 2d
865, 866 (Fla. 3d DCA 1992).
B. Trial Court’s April 17, 2017 Order Denying Rehearing of March 10, 2017
Order
Having concluded that we lack jurisdiction to review the trial court’s March
10, 2017 order, we ordinarily would be precluded from separately reviewing the
trial court’s April 17, 2017 order denying rehearing of that order by virtue of rule
9.130(a)(4).7 Indeed, rule 9.130(a)(4) generally prohibits appellate review of orders
on motions for rehearing of final orders separately from appellate review of the
underlying final order. Ricardo v. Wells Fargo Bank Nat’l Ass’n, 166 So. 3d 967,
968 (Fla. 3d DCA 2015); Christ v. Christ, 103 So. 3d 1056, 1057 (Fla. 1st DCA
2013); Bastida v. Vitaver, 590 So. 2d 1092, 1092-93 (Fla. 3d DCA 1991).
But rule 9.130(a)(4)’s “separate review” prohibition is not absolute; a
careful reading of the relevant text of rule 9.130(a)(4) reveals that the rule’s
appellate prohibition is limited only to those orders on motions for rehearing that
“suspend rendition” of the underlying final order. Fla. R. App. P. 9.130(a)(4).
7 Rule 9.130(a)(4) provides: “Orders disposing of motions that suspend rendition are not reviewable separately from a review of the final order; provided that orders granting motions for new trial in jury and non-jury cases are reviewable by the method prescribed in rule 9.110.”
7
Hence, the rule is inapplicable to prevent separate review of an order on an
authorized, timely rehearing motion that does not suspend rendition of the
underlying final order. The long line of cases holding that a district court lacks
jurisdiction to review an order on an unauthorized motion seeking rehearing of a
non-final order is inapposite.
As discussed above, pursuant to rule 9.020(i), authorized and timely motions
for rehearing of final orders generally suspend rendition of the final order until the
rehearing motion has been adjudicated; except, as also discussed above, pursuant
to the express provisions of rule 9.130(a)(5), a rehearing motion directed toward an
order on a party’s rule 1.540 motion – whether that order is final or non-final –
does not suspend rendition of the order.
Because rule 9.130(a)(4)’s “separate review” prohibition applies only to
orders on motions that suspend rendition, and because NDM’s timely and
authorized8 rehearing motion did not suspend rendition of the March 10, 2017
8 We are mindful that the committee notes purporting to explain our Supreme Court’s 2008 amendment to rule 9.130(a)(5) characterize rehearing motions directed toward rule 1.540 motions as unauthorized. Those notes read, in relevant part, as follows: “Subdivision (a)(5) has been amended to recognize the unique nature of the orders listed in this subdivision and to codify the holdings of all of Florida’s district courts of appeal on this subject. The amendment also clarifies that motions for rehearing directed to these particular types of orders are unauthorized and will not toll the time for filing a notice of appeal.” Fla. R. App. P. 9.130(a)(5) committee notes (2008). Committee notes, however, are not binding authority. D. K. D. v. State, 470 So. 2d 1387, 1389 (Fla. 1985). Given the unique posture of the instant case, these committee notes seem in direct conflict with our Supreme Court’s holding in Clearwater Federal Savings & Loan Ass’n v. Sampson, 336 So.
8
order, rule 9.130(a)(4)’s “separate review” prohibition does not preclude this
Court from reviewing the trial court’s April 17, 2017 order, notwithstanding that
this Court lacks jurisdiction to review the underlying March 10, 2017 order.
III. Conclusion
While NDM’s March 24, 2017 rehearing motion – directed toward the trial
court’s March 10, 2017 rule 1.540 order – was both timely and, under the facts of
this case, authorized, it did not toll the rendition of the trial court’s March 10, 2017
order, pursuant to rule 9.130(a)(5). Because NDM did not timely appeal that
March 10, 2017 order, we lack jurisdiction to review that order. We deny NDM’s
instant motion seeking reconsideration of this Court’s June 9, 2017 order
dismissing NDM’s appeal of the March 10, 2017 order.
Because NDM timely appealed the trial court’s April 17, 2017 order
denying NDM’s rehearing motion, we vacate that portion of our June 9, 2017
dismissal order that dismissed NDM’s appeal of the trial court’s April 17, 2017
order. Within fifteen days of this order, NDM shall file its Initial Brief,
accompanied by an appendix as prescribed by Florida Rule of Appellate Procedure
2d 78 (Fla. 1976). Clearwater Savings expressly holds that a motion for rehearing directed toward a post-decretal order adjudicating an issue not adjudicated in the final judgment, such as NDM’s rehearing motion, is authorized. Id. at 79. While the Clearwater Savings Court went on to hold that Clearwater Savings’s rehearing motion did toll the rendition of the underlying order, Clearwater Savings was not confronted, as is NDM, with a plain and unambiguous rule precluding tolling. Id. at 80.
9
9.220. Additional briefs shall be served as prescribed by Florida Rule of Appellate
Procedure 9.210. We emphasize that, for the reasons stated above, the issue on
appeal is limited strictly to whether the trial court erred in entering its April 17,
2017 order.
Motion for reconsideration granted in part and denied in part.
10
Third District Court of AppealState of Florida
Opinion filed August 16, 2017.Not final until disposition of timely filed motion for rehearing.
________________
No. 3D16-1958Lower Tribunal No. 14-8459
________________
Platinum Luxury Auctions, LLC, Trayor Lesnock, and Kevin Vaughn,
Appellants,
vs.
Concierge Auctions, LLC,Appellee.
An Appeal from the Circuit Court for Miami-Dade County, William Thomas, Judge.
Tripp Scott, P.A., and Ryan H. Lehrer and Paul O. Lopez (Fort Lauderdale), for appellants.
Carey Rodriguez Milian Gonya, LLP, and Patrick E. Gonya, Jr., for appellee.
Before LAGOA, SALTER, and FERNANDEZ, JJ.
LAGOA, J.
The appellants, Platinum Luxury Auctions, LLC (“PLA”), Trayor Lesnock
(“Lesnock”), and Kevin Vaughn (“Vaughn”) (collectively, the “Appellants”),
appeal the trial court’s order granting appellee, Concierge Auctions, LLC’s
(“Concierge”), motion to enforce settlement agreement. Because the trial court
erred in finding that Appellants violated the Non-Disparagement provision of the
parties’ Confidential Settlement Agreement, we reverse.
I. FACTUAL AND PROCEDURAL HISTORY
PLA and Concierge are acknowledged rivals in the auction business. On
April 1, 2014, Concierge filed suit against PLA, Lesnock, and Vaughn alleging
claims for, among other things, defamation, violation of the Florida Unfair and
Deceptive Trade Practices Act, tortious interference with business relationships,
and conspiracy. Concierge alleged that Lesnock, using a pseudonym, posted
negative comments about Concierge in the comments section of a January 22,
2014, online magazine article about Concierge’s unsuccessful auction of a home in
Highland Park, Illinois. Lesnock admitted in his deposition testimony that he was
the author of the negative comments, which were posted on or about January 27,
2014 (the “January 27 blog post”).
On September 5, 2014, Concierge, PLA, Lesnock, and Vaughn executed a
Confidential Settlement Agreement (the “Settlement Agreement”). The Settlement
Agreement set forth in detail the contents of Lesnock’s January 27 blog post.
2
Under the terms of the Settlement Agreement, the Appellants agreed to publish,
within fifteen days from the execution of the Settlement Agreement, a retraction of
the January 27 blog post. In accordance with these terms, on September 14, 2014,
the Appellants published a retraction of the January 27 blog post on the relevant
magazine’s website.
The Settlement Agreement also contained a provision (the “Non-
Disparagement Provision”) in which the Appellants agreed not to make any
defamatory, disparaging, or critical statements, written or verbal, about Concierge
after execution of the Settlement Agreement. The Non-Disparagement Provision
states,1 in pertinent part:
3. Non-Disparagement. a. Defendants acknowledge and agree that the
professional, business and personal reputations of Plaintiff and its employees, directors, and officers are important and should not be impaired by Defendants after this Agreement is executed. Therefore, Defendants agree not to make any statements, written or verbal, or cause or encourage others to make any statements, written or verbal, that defame, disparage or in any way criticize the personal or business reputation, practices, or conduct of Plaintiff, its employees, directors, and officers . . . .
(emphasis added).
1 Although the trial court entered an agreed order sealing the Settlement Agreement as confidential pursuant to Florida Rule of Judicial Administration 2.420(c)(9), we quote this portion of the Non-Disparagement Provision as it is central to the issue on appeal and consists of contractual language that does not reveal confidential information.
3
Shortly thereafter, the Appellants and Concierge filed a joint stipulation of
dismissal with prejudice. On March 30, 2016, the trial court entered an Agreed
Order Approving Joint Stipulation of Dismissal with Prejudice dismissing the case
with prejudice and specifically retaining jurisdiction “to enforce the terms of the
confidential settlement agreement executed between the parties dated September 5,
2014.”
On April 21, 2016, Concierge filed a Motion to Enforce Settlement
Agreement, claiming that PLA and Lesnock were in violation of the Non-
Disparagement Provision because a January 2014 online article (the “January 2014
online article”) was “available online and accessible” on two websites operated and
controlled by PLA and Lesnock. Concierge claimed that the January 2014 online
article criticized and disparaged Concierge’s involvement in the same auction at
issue in the January 27 blog post. Concierge argued that the January 2014 online
article “indisputably violates the Non-Disparagement Provision,” and sought an
order directing PLA and Lesnock to “take down” the January 2014 online article
from their websites.
In their Response to the Motion to Enforce Settlement Agreement, PLA and
Lesnock argued that the Non-Disparagement Provision does not require the
retraction of statements made prior to the time the parties entered into the
Settlement Agreement. PLA and Lesnock relied on the fact that the January 2014
4
online article was written and posted nine months before the parties executed the
Settlement Agreement on September 5, 2014, and that it was not included in the
terms of the Settlement Agreement.
PLA and Lesnock also asserted that Concierge knew about the January 2014
online article at the time the parties executed the Settlement Agreement, but chose
to not include the article as part of the settlement terms, which only required the
retraction of the January 27 blog post. PLA and Lesnock supported their Response
with Lesnock’s affidavit in which Lesnock attested that the January 2014 online
article “was one of the topics raised by [Concierge’s] counsel during my deposition
in this case prior to the signing of the settlement agreement.”2 Indeed, as conceded
in its Answer Brief to this Court, Concierge does not dispute that it was aware of
the January 2014 online article at the time it executed the Settlement Agreement
with the Appellants.
After a hearing on the matter, the trial court entered its order granting the
Motion to Enforce. The trial court found that the January 2014 online article
disparages Concierge and that the Appellants’ refusal to remove it from their
websites violates the Non-Disparagement Provision contained in the Settlement
Agreement. The trial court directed the Appellants to remove the January 2014
online article from their websites within seven days of the date of the order.
2 Lesnock also attested that the contents of the January 2014 online article had not been modified.
5
This appeal followed.
II. STANDARD OF REVIEW
“[A] trial court’s decision construing a contract presents an issue of law that
is subject to the de novo standard of review.” Tropical Glass & Constr. Co. v.
Gitlin, 13 So. 3d 156, 158 (Fla. 3d DCA 2009). A settlement agreement is
contractual in nature and therefore interpreted and governed by contract law. See
Muñoz Hnos, S.A. v. Editorial Televisa Int’l, S.A., 121 So. 3d 100, 103 (Fla. 3d
DCA 2013). We therefore review de novo the trial court’s order interpreting the
Settlement Agreement. See Pinnacle Three Corp. v. EVS Invs., Inc., 193 So. 3d
973, 975-76 (Fla. 3d DCA 2016) (“In the present case, we review the trial court's
ruling de novo, as it depends on the interpretation of paragraph 7 of the settlement
agreement.”); see also Commercial Capital Res., LLC v. Giovannetti, 955 So. 2d
1151, 1153 (Fla. 3d DCA 2007) (applying de novo standard of review to trial
court’s order enforcing settlement agreement).
III. ANALYSIS
When a trial court approves a settlement agreement by order and retains
jurisdiction to enforce its terms, the trial court has the jurisdiction to enforce the
terms of the settlement agreement. See Paulucci v. Gen. Dynamics Corp., 842 So.
2d 797, 803 (Fla. 2003); Sarhan v. H & H Inv’rs, Inc., 88 So. 3d 219, 220 (Fla. 3d
DCA 2011). It is well-established, however, that “the extent of the court’s
6
continuing jurisdiction to enforce the terms of the settlement agreement is
circumscribed by the terms of that agreement.” Paulucci, 842 So. 2d at 803; see
also Sarhan, 88 So. 3d at 220; Olen Props. Corp. v. Wren, 109 So. 3d 263, 265
(Fla. 4th DCA 2013); Rocha v. Mendonca, 35 So. 3d 973, 976 (Fla. 3d DCA
2010); W.C. Riviera Partners, LC. v. W.C.R.P., LC., 912 So. 2d 587, 589 (Fla. 2d
DCA 2005). For that reason, a trial court exceeds the jurisdiction it reserved for
itself when it grants to a party seeking enforcement relief that is beyond the
obligations set forth in the parties’ settlement agreement. See Pinnacle Three
Corp., 193 So. 3d at 976 (stating that trial court properly concluded that relief
sought in motion to enforce settlement agreement went beyond obligations detailed
in settlement agreement and was thus beyond the jurisdiction retained by the trial
court); Sarhan, 88 So. 3d at 220 (finding that trial court exceeded the jurisdiction it
reserved for itself when it summarily entered a final judgment of foreclosure and
that remedy was not authorized in stipulation of settlement).
A settlement agreement is governed by contract law. See Muñoz, 121 So.
3d at 103; see also Spiegel v. H. Allen Holmes, Inc., 834 So. 2d 295, 297 (Fla. 4th
DCA 2002) (stating that settlement agreements “are interpreted and governed by
the law of contracts”). A trial court is not free to re-write the terms of a settlement
agreement, and “[w]here the contractual language is clear and unambiguous,
‘courts may not indulge in construction or modification and the express terms of
7
the settlement agreement control.’” Commercial Capital Res., LLC, 955 So. 2d at
1153 (quoting Sec. Ins. Co. of Hartford v. Puig, 728 So. 2d 292, 294 (Fla. 3d DCA
1999)). “An order enforcing a settlement agreement must conform with the terms
of the agreement and may not impose terms that were not included in the
agreement.” Johnson v. Bezner, 910 So. 2d 398, 401 (Fla. 4th DCA 2005).
Here, the trial court retained jurisdiction “to enforce the terms of the
confidential settlement agreement executed between the parties dated September 5,
2016.” The express terms of the parties’ Settlement Agreement, therefore,
delineate the trial court’s enforcement power. See Paulucci, 842 So. 2d at 803.
Under the clear terms of the Settlement Agreement, the Non-Disparagement
Provision applies to any written or verbal statements made after the agreement was
executed—September 5, 2014. The online article at issue was posted in January of
2014, well before the parties entered into the Settlement Agreement, and the record
evidence establishes that Concierge knew about the January 2014 online article at
the time it entered into the Settlement Agreement. The Settlement Agreement only
required the retraction of the January 27 blog post, and did not address the January
2014 online article in any way or otherwise require its retraction or removal. Had
Concierge wanted the Appellants to remove the January 2014 online article from
their websites, Concierge could have negotiated that term into the Settlement
Agreement. Concierge did not do so.
8
Under the guise of enforcing the Settlement Agreement, the trial court
impermissibly re-wrote the Settlement Agreement. Specifically, the trial court
construed the Settlement Agreement’s express language limiting the Non-
Disparagement Provision to statements made after September 5, 2014, to apply to
the January 2014 online article—an article published before September 5, 2014,
and one that the parties knew about prior to entering into the Settlement Agreement
but which they chose not to include within its terms. Cf. Rocha, 35 So. 3d at 976
(reversing trial court’s order enforcing settlement agreement and finding that
“[a]lthough a trial court may be motivated to do what it considers to be fair and
equitable, it retains no jurisdiction to rewrite the terms of a . . . settlement
agreement. Under the guise of enforcing the agreement, the trial court here
impermissibly modified it.”). Accordingly, we find that the trial court’s order
requiring the removal of the January 2014 online article exceeded the jurisdiction
the trial court reserved for itself to enforce the terms of the Settlement Agreement.
IV. CONCLUSION
Because the Settlement Agreement did not require the Appellants to remove
the January 2014 online article from their websites and the January 2014 online
article was not a statement made after the date of execution of the Settlement
Agreement, the trial court impermissibly exceeded its jurisdiction in finding the
Appellants in violation of the Settlement Agreement. The order on appeal
9
enforcing the Settlement Agreement and ordering the removal of the January 2014
online article is therefore reversed.
Reversed.
10
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT
THE WARWICK CORPORATION, ALL SUNNY HOTELS, INC., and
H.E.S. HOTELS CORP., Appellants,
v.
MATTHEW TURETSKY, ALLIANT INSURANCE SERVICES, INC., SWETT & CRAWFORD OF ILLINOIS, INC., CHUBB CUSTOM
INSURANCE COMPANY, and LANDMARK AMERICAN INSURANCE COMPANY, Appellees.
No. 4D16-2567
[August 16, 2017]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Jack Tuter, Judge; L.T. Case No. 10-47258 CACE (07). Joel D. Eaton of Podhurst Orseck, P.A., Miami, and Blaut Weiss Law
Group, Plantation, for appellants. Lauren D. Levy of Levy Law Group, Coral Gables, for appellee Landmark
American Insurance Company.
LEVINE, J.
Appellants have two insurance policies for their four hotels. The primary policy limit is $5,000,000 per occurrence and the excess policy limit is $21,035,000 per occurrence, with the excess policy payout not to exceed the listed value of each of the four insured hotels. Appellants argue the excess policy is ambiguous because the “statement of values,” which includes the listed insured value of each of the four hotels, is not attached to the excess insurance policy and is not titled “Statement of Values.” Appellants also claim the excess policy is “illusory” because one of the four insured hotels is valued at $5,000,000, which would equal the total value covered and payable under the primary policy.
We conclude that the policy is unambiguous because the “Statement of
Values” was incorporated by reference in the excess policy and sufficiently authenticated. We also conclude that the excess policy is not illusory
2
because the terms of the excess policy do not “completely contradict” each other, and does not completely negate the entirety of coverage it purportedly provides. We affirm the trial court’s summary judgment to that effect. Appellants, The Warwick Corporation, All Sunny Hotels, Inc., and H.E.S. Hotels Corp. (collectively “Warwick”), had a primary insurance policy with Chubb Insurance Company for $5,000,000, which covered three hotels in New Orleans, Louisiana; Fort Lauderdale, Florida; and Deerfield Beach, Florida.
Warwick also had an excess insurance policy with Landmark American Insurance Company. The excess policy insured the three hotels referenced above as well as an additional hotel located in St. Thomas in the Virgin Islands. The excess policy insured the four properties for “$21,035,000 Per Occurrence not to exceed values reported,” and covered “All Risk Excluding Flood, Earth Movement and Windstorm/Hail.” The excess policy also contained the following Schedule Limit of Liability endorsement:
It is understood and agreed that the following special terms and conditions apply to this policy: 1. In the event of loss hereunder, liability of the Company shall be limited to the least of the following in any one “occurrence”:
. . . . b. 100% of the individually stated value for each scheduled item of property insured at the location which had the loss as shown on the latest Statement of Values on file with this Company, less applicable deductibles and primary and underlying excess limits. If no value is shown for a scheduled item then there is no coverage for that item . . . .
No “statement of values” was attached to the Landmark Policy.
However, when Warwick’s insurance agent marketed the policy to insurers, the agent used a spreadsheet titled “Property Spreadsheet” to represent the value of the four properties and transmitted the spreadsheet to wholesale brokers and Landmark. The agents, brokers, and Landmark all agreed the spreadsheet was a statement of values. The latest version of the alleged statement of values on file with Landmark stated the total value of the New Orleans hotel was $5,000,000; the value of the Fort Lauderdale hotel was $7,035,000; the value of the Deerfield Beach hotel
3
was $2,000,000; and the value of the St. Thomas hotel was $12,000,000. The total value of the properties was $26,035,000. The excess coverage for the New Orleans hotel was “shell coverage,” as requested by Warwick, that covered only the building.
Landmark used the alleged statement of values to calculate the Landmark Policy’s premium. Landmark decided to charge the minimum premium, $2,625, to insure the New Orleans property because triggering the policy would require that a single occurrence damage both the New Orleans property and at least one other property.1
Warwick subsequently suffered a loss at the New Orleans hotel that it
alleged was in excess of the primary policy. Landmark claimed it was not liable because the policy stated Landmark was liable only for the property’s value, $5,000,000, less the primary insurance, also $5,000,000.
Warwick sued Landmark for a declaratory judgment and breach of
contract, claiming Landmark was liable under the excess policy.2 Both Warwick and Landmark moved for summary judgment. Warwick argued the Landmark Policy was ambiguous because the property spreadsheet used as the statement of values was not titled “Statement of Values,” and Landmark could not cure this ambiguity with extrinsic evidence. Warwick alternatively argued the Landmark Policy was illusory because it did not provide coverage for the New Orleans hotel. Landmark argued that it had sufficiently authenticated the latest statement of values, which was incorporated by reference, and that it was not liable under the unambiguous terms of the excess policy.
The trial court granted Landmark’s motion for summary judgment. The trial court found that Landmark’s policy incorporated the statement of values by reference and that the unambiguous terms of the policy indicated that Landmark was not liable. The trial court refused to rewrite the policy to create liability. On appeal, Warwick reiterates the argument it made at trial and states the trial court erred in considering extrinsic evidence to resolve the
1 Including taxes, Warwick paid $6,654.50 to insure the New Orleans hotel. Landmark claims that Warwick received a discount on the policy by lumping the New Orleans hotel with the other insured properties. 2 Warwick also sued the primary insurer, Chubb, and Warwick’s insurance agents and brokers. Warwick settled with Chubb, and the trial court stayed proceedings against the agents and brokers.
4
allegedly ambiguous policy. We review the trial court’s grant of summary judgment de novo. See Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). Landmark’s policy is clearly unambiguous. A contract is ambiguous where the language at issue “is reasonably susceptible to more than one interpretation.” Lambert v. Berkley S. Condo. Ass’n, 680 So. 2d 588, 590 (Fla. 4th DCA 1996). The terms of Landmark’s policy are not “reasonably susceptible to more than one interpretation.” See id. The policy states that the “Limit Insured” is “$21,035,000 Per Occurrence not to exceed values reported.” (emphasis added). An endorsement to the policy states Landmark’s liability is limited to “100% of the individually stated value for each scheduled item of property insured at the location which had the loss as shown on the latest Statement of Values on file with [Landmark], less applicable deductibles and primary and underlying excess limits.” (emphasis added). Thus, the policy has a total limit of liability of $21,035,000, but liability for each scheduled item is limited to that item’s individual value. The fact that the “statement of values” is not titled as such and is not attached to the policy does not render the policy ambiguous. An outside document may be incorporated by reference into a contract. See BGT Grp., Inc. v. Tradewinds Engine Servs., LLC, 62 So. 3d 1192, 1194 (Fla. 4th DCA 2011). This outside document must be authenticated, and authenticity is a question of fact. See § 90.901, Fla. Stat. (2016). (stating that authentication requires the proponent of the evidence to offer evidence “to support a finding that the matter in question is what its proponent claims”); Sunbelt Health Care v. Galva, 7 So. 3d 556, 559-60 (Fla. 1st DCA 2009). Thus, we find no error in the trial court using extrinsic evidence to resolve the factual question of whether the document titled “Property Spreadsheet” was the latest statement of values on file with Landmark.3 We next consider whether the Landmark Policy is illusory because it does not provide the coverage that Warwick claimed it obtained.
“When limitations or exclusions completely contradict the insuring provisions, insurance coverage becomes illusory.” Purrelli v. State Farm Fire & Cas. Co., 698 So. 2d 618, 620 (Fla. 2d DCA 1997). Thus, “[a]n insurance policy cannot grant rights in one paragraph and then retract 3 Warwick does not argue the trial court erred when it concluded no questions of fact existed towards the statement of values’ authenticity.
5
the very same right in another paragraph called an ‘exclusion.’” Tire Kingdom, Inc. v. First S. Ins. Co., 573 So. 2d 885, 887 (Fla. 3d DCA 1990). Where a policy contains internally inconsistent language, a court must “adopt[] . . . the construction [of the policy] that will afford the most coverage.” Id. See also Zucker For BankUnited Fin. Corp. v. U.S. Specialty Ins. Co., 856 F.3d 1343, 1352 (11th Cir. 2017) (“So when a policy exclusion does swallow up an insuring provision, the Florida Courts conclude that the policy is ambiguous, and resolve that ambiguity by ignoring the exclusion.”) (citations omitted). A policy is illusory only if there is an internal contradiction that completely negates the coverage it expresses to provide. For example, in Purrelli, the policy purported to cover certain intentional torts, but excluded intended acts. 698 So. 2d at 619. This policy was illusory as it was effectively “complete nonsense.” Id. at 620 (citation omitted); see also Princeton Express v. DM Ventures USA LLC, 209 F. Supp. 3d 1252, 1260 (S.D. Fla. 2016) (stating a policy was illusory where it stated it covered advertising injury and also stated advertising injury was excluded); Certain Underwriters at Lloyds, London Subscribing to Policy No. SA 10092-11581 v. Waveblast Watersports, Inc., 80 F. Supp. 3d 1311, 1318-19 (S.D. Fla. 2015) (finding policy illusory where it covered parasailing but excluded watercrafts). On the other hand, where a limitation on coverage does not “completely swallow[] the insuring provision,” the policy is not illusory. See Auto-Owners Ins. Co. v. Christopher, 749 So. 2d 581, 582 (Fla. 5th DCA 2000). For example, in Interline Brands, Inc. v. Chartis Specialty Insurance Co., 749 F.3d 962 (11th Cir. 2014), the insured, a product distribution and marketing corporation, purchased a policy that covered advertising injury. However, the policy excluded advertising injury “arising out of or resulting from, caused directly or indirectly, in whole or in part by, any act that violates any statute, ordinance or regulation of any federal, state or local government.” Id. at 964. The insured was sued for sending junk faxes in violation of federal law and the insurer denied coverage. The Eleventh Circuit held the policy was not illusory because
the Exclusion only excludes from coverage violations of a statute, ordinance, or regulation (i.e. not common law) and only in relation to “sending, transmitting or communicating of any material or information.” While this is a significant Exclusion (especially in light of Interline’s business), it does not render the policy absurd or completely contradict the insuring provisions.
6
Id. at 967; see also Colony Ins. Co. v. Total Contracting & Roofing, Inc., No. 10-23091-CIV, 2011 WL 4962351, *5 (S.D. Fla. Oct. 18, 2011) (stating that for the policy in that case to be illusory it “would need to expressly cover damages from hazardous materials and simultaneously exclude damages arising from hazardous materials”). In the instant case, the policy’s terms do not “completely contradict” one another like the terms in Purrelli. See Purrelli, 698 So. 2d at 619. Although the limitations on triggering the excess policy are “significant,” these limitations do not “render the policy absurd or completely contradict the insuring provisions.” See Interline Brands, Inc., 749 F.3d at 967. We recognize that Landmark will not, barring extraordinary circumstances, normally be liable for damages to the New Orleans hotel because significant distances separate it from the other insured properties and the policy excludes wind, water, and earth movement. Nevertheless, Landmark proposed at oral argument several examples for which it could be liable under the policy. For example, arson, riots, or any of the covered actions committed by a conspiracy could damage multiple properties and invoke coverage. Although such circumstances are unlikely, Warwick, a sophisticated business entity, paid a minimal premium for such minimal coverage. Warwick also purchased coverage for the New Orleans hotel as part of an umbrella insurance policy that insured and covered the four listed hotels. Warwick “chose to buy the policy that it bought. It cannot change that choice now . . . .” See Zucker, 856 F.3d at 1353. In summary, we affirm the trial court’s entry of summary judgment, and conclude the policy was unambiguous and was not illusory. Affirmed. CONNER, J., and SMALL, LISA, Associate Judge, concur.
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Not final until disposition of timely filed motion for rehearing.