Summary
recognizing that a court may not modify a contract to make it more reasonable or advantageous to one of the contracting parties
Summary of this case from Fla. First Fin. Servs. v. RandolphOpinion
No. 1D20-2077
11-17-2021
UNIVERSAL MEDICAL INVESTMENT CORP., Appellant, v. MIKE ROLLISON FENCE, LLC, d/b/a Rollison Fence, LLC, and Michael J. Rollison, Appellees.
Jeremy Dicker of Sachs Sax Caplan, P.L., Boca Raton, for Appellant. No appearance for Appellees.
Jeremy Dicker of Sachs Sax Caplan, P.L., Boca Raton, for Appellant.
No appearance for Appellees.
Jay, J.
Universal Medical Investment Corporation ("Universal"), contracted with Appellee, Mike Rollison Fence, LLC d/b/a Rollison Fence, LLC ("Rollison"), to build a large fence around Universal's property. When Rollison defaulted under the contract, the parties entered into a "Letter of Understanding" allocating Rollison additional time to finish constructing the fence. Rollison did not finish the project in the time allotted, however, prompting Universal to file suit for breach of contract. The ensuing trial proceeded solely on the issue of damages. The trial court entered a final judgment awarding Universal a sum of money for damages that was considerably less than what it claimed it had proved under the terms of the contract and the Letter of Understanding. In its motion for rehearing, Universal argued that point. The trial court responded by finding that the relevant terms of the Letter of Understanding were ambiguous. Consequently, it construed the language against Universal—as the drafter—and in favor of Rollison. This appeal followed.
I.
The record does not contain a transcript of the hearing for either the bench trial or the motion for rehearing, and the statement of evidence submitted by Universal was not approved by the trial court. But that omission does not hinder our review because we find that the error sits squarely on the face of the judgment and the order denying Universal's motion for rehearing. See Ferguson v. Ferguson , 54 So. 3d 553, 556 (Fla. 3d DCA 2011) ("[A]n appellate court may, as we now do, reverse a trial court order if there exists reversible error on the face of the order or judgment."); Casella v. Casella , 569 So. 2d 848, 849 (Fla. 4th DCA 1990) (" Applegate [v. Barnett Bank of Tallahassee , 377 So. 2d 1150 (Fla. 1979),] is not controlling as we find reversible error on the face of the amended judgment alone.").
The following record facts are undisputed. On October 1, 2018, Universal and Rollison entered into a contract under the terms of which Rollison agreed to build an eight-foot-high fence on Universal's property, consisting of approximately 15,000 linear feet. The agreed-upon total cost for the job was $93,000. Universal was required to pay Rollison the amount of $40,000 upon the execution of the contract; $5,000 upon commencement of the work; $24,000 upon completion of 6,000 feet of fencing; and $24,000 upon completion of the project.
After Rollison defaulted under the contract, Universal's attorney reached out with a Letter of Understanding, affording Rollison the opportunity to cure its breach. At the time, Universal had already paid Rollison $69,000, which equaled the sum of the amount due at the time of contracting plus the first two contractual installments. The Letter of Understanding indicated that despite the listed "deficiencies and defaults" by Rollison, Universal "desire[d] to make one attempt to complete the project with Rollison, prior to instigating legal action ...." Among other conditions, the letter indicated that Rollison would complete the project within thirty days from the date of the letter. Paragraph "L" of the letter, which lies at the heart of this appeal, provided:
Rollison understands and agrees that failure to complete the project to Universal's satisfaction within the time frame set forth in paragraph (G) herein, shall constitute a default of the agreement contained in this Letter of Understanding in addition to a default of the Contract, and upon default Rollison shall be entitled to NO PAYMENT WHATSOEVER, regardless of the status of the project, and Universal shall have the right to pursue any legal avenue available to seek damages in Court from Rollison, and Mike Rollison, individually. By signing below, Rollison and Mike Rollison, individually, hereby waive any right to bring a claim for quantum meruit, partial payment or any other cause of action based on a legal or equitable right to receive payment for partial work performed on this project in the event of a default by Rollison.
(Emphasis in original.) By signing the letter, "Rollison admit[ted] it [was] in default of the Contract." On the same day the Letter of Understanding issued, Michael Rollison signed it individually and in his capacity as manager of Rollison Fence, LLC. Above the signature lines was the following paragraph: "I have thoroughly read the foregoing Letter of Understanding. I agree that the facts stated therein are true and correct, and I accept the offer and all terms and conditions set forth therein. I have full authority to accept the offer by signing below."
By August 27, 2019—well past the thirty days afforded by the Letter of Understanding—Rollison still had not completed the project, and was, once again, in default under the contract as modified by the Letter of Understanding. As a result, Universal filed an eight-count complaint against Rollison and Michael Rollison individually. Counts I and II alleged breach of contract; Counts III and IV alleged fraud in the inducement; Counts V and VI alleged negligence; and Counts VII and VIII alleged a violation of Florida's Deceptive and Unfair Trade Practices Act. The clerk of the court ultimately entered a default against Rollison for failing to serve or file any document as required by law in response to the complaint.
Following a bench trial, the trial court entered its Final Judgment. In it, the court took note of the clerk's default entered against Rollison and the fact that the business entity did not appear via counsel or participate in the trial. Accordingly, the trial proceeded against Rollison solely on the issue of damages, and the court found that Universal had proved damages only in the amount of "$13,909.25 for work paid but not completed" and "$2,444.93 for insurance reimbursement." Therefore, it ordered that Universal would recover from Rollison the total sum of $16,354.18.
The law is firmly established when it comes to defaults. "The effect of a default ... is that a defendant admits to all well-pleaded allegations of a complaint ...." Ciotti v. Hubsch , 302 So. 3d 497, 499 (Fla. 5th DCA 2020) (citation omitted). This means that a "default precludes [the defaulted] party from contesting the existence of the plaintiff's claim and liability thereon." The Florida Bar v. Porter , 684 So. 2d 810, 813 n.4 (Fla. 1996) (citation omitted). "Thereafter, [the defaulted] party has the right to contest damages caused by the party's wrong but no other issue." Id. (citation omitted). Here, the default "operate[d] as an admission" of Rollison's liability as asserted in the well-pleaded allegations of Universal's complaint. Rich v. Spivey , 922 So. 2d 326, 327 (Fla. 1st DCA 2006) (citations omitted).
Universal filed a timely motion for rehearing pursuant to Florida Rule of Civil Procedure 1.530. In the motion, Universal argued, in part, that it was entitled to at least $69,000 in damages—comprising the amount it had paid Rollison at the time the parties executed the original contract and then the first two installments due thereafter. Universal next emphasized the provisions of the Letter of Understanding, not the least of which stated that upon default, Rollison would be entitled to " ‘NO PAYMENT WHATSOEVER, regardless of the status of the project.’ " Universal added: "While it is possible that the court could have been [sic] considered certain items of damages to be unproven, or inappropriate for some other reason, certain items of damages such as the amount paid to [Rollison] were admitted and therefore fixed." Rollison did not file a response to the motion for rehearing.
In its order denying the motion, the trial court considered Universal's argument for greater damages as set forth above. It then declared—evidently for the first time and on its own initiative—that the defining issue was "whether the Letter of Understanding is ambiguous." The court recognized the settled law "that contracts are to be interpreted in accordance with the plain meaning of the language used, and it is not the trial court's role to rewrite a contract to make it more reasonable for one of the parties." See Churchville v. GACS Inc. , 973 So. 2d 1212, 1216 (Fla. 1st DCA 2008). But it also acknowledged the equally settled "legal construct that an ambiguous term in a contract is to be construed against the drafter." See City of Homestead v. Johnson , 760 So. 2d 80, 84 (Fla. 2000). Reaffirming the axiom that " ‘[l]anguage in a document is ambiguous when it is uncertain in meaning and may be fairly understood in more ways than one and is susceptible of interpretation in opposite ways,’ " Churchville , 973 So. 2d at 1216, the trial court looked to the pertinent language in the Letter of Understanding. It held:
In the case at bar, the Letter of Understanding addressed many issues the original contract failed to include. However, even when considering the Letter of Understanding to be a contract modification, the document can be interpreted in at least two different ways. Thus, it follows that the document is ambiguous. More specifically, the document can be read to apply to the defendant's performance under the contract and payment from the Plaintiff from that date forward. On the other hand, it has been argued that the document should be read to apply to all of the conditions and consideration from the signing of the original contract. The mere fact that the Letter of Understanding can be interpreted both ways answers any question of ambiguity in the positive. To the extent that this agreement set forth in the Letter of Understanding is ambiguous, it is construed against Universal Medical Investment Corporation.
We agree with Universal that the trial court erred in concluding that the disputed language in the Letter of Understanding was ambiguous.
II.
Issues of contractual interpretation are reviewed de novo. Speegle Constr. Co. v. Dist. Bd. of Trs. of Nw. Fla. State Coll. , 75 So. 3d 360, 361 (Fla. 1st DCA 2011) (citation omitted).
" ‘[A]ny ambiguity in the terms [of a contract] should be resolved in favor of upholding the purpose of the agreement and giving effect to every term in the agreement ." Id. (quoting Johnson , 760 So. 2d at 83 ). As the Fourth District observed in Lambert v. Berkley S. Condo. Ass'n , 680 So. 2d 588 (Fla. 4th DCA 1996) :
Whether a document is ambiguous depends upon whether it is reasonably susceptible to more than one interpretation. State Farm Fire & Casualty Co. v. De Londono , 511 So. 2d 604 (Fla. 3d DCA), rev. dismissed , 519 So. 2d 988 (Fla. 1987). However, a true ambiguity does not exist merely because a document can possibly be interpreted in more than one manner. American Medical Int'l, Inc. v. Scheller , 462 So. 2d 1 (Fla. 4th DCA 1984), rev. denied , 471 So. 2d 44 (Fla.), and cert. denied , 474 U.S. 947, 106 S. Ct. 345, 88 L.Ed. 2d 292 (1985). Further, when a document's language is clear, a court cannot indulge in construction or interpretation of its plain meaning . BMW of N. Am., Inc. v. Krathen , 471 So. 2d 585 (Fla. 4th DCA 1985), rev. denied , 484 So. 2d 7 (Fla. 1986).
Id. at 590 (emphasis added). Furthermore, in American Medical Int'l, Inc. v. Scheller , 462 So. 2d 1 (Fla. 4th DCA 1984), the Fourth District emphasized: "[F]anciful, inconsistent, and absurd interpretations of plain language are always possible. It is the duty of the trial court to prevent such interpretations." Id. at 7.
The agreement embodied in the Letter of Understanding suffers from no such uncertainty. Instead, it states boldly and unabashedly that should Rollison default, it would be entitled to "NO PAYMENT WHATSOEVER, regardless of the status of the project ...." (Italics supplied.) In addition to the all-caps "whatsoever" advisory, the remaining terms in the paragraph provided that, by signing the agreement, Rollison "waived" the following: any right to bring a claim for (1) "quantum meruit" and (2) "partial payment or any other cause of action based on a legal or equitable right to receive payment for partial work performed on this project in the event of a default by Rollison." (Emphasis added.) In the face of this unadorned, emphatic language, we are hard-pressed to find any ambiguity. Furthermore, as Universal points out, the trial court's interpretation effectively rewrote the Letter of Understanding. " ‘A party is bound by, and a court is powerless to rewrite, the clear and unambiguous terms of a voluntary contract.... It is not the role of the courts to make an otherwise valid contract more reasonable from the standpoint of one contracting party.’ " Brooks v. Green , 993 So. 2d 58, 61 (Fla. 1st DCA 2008) (internal citations omitted) (quoting Med. Ctr. Health Plan v. Brick , 572 So. 2d 548, 551 (Fla. 1st DCA 1990) ). This Court acknowledged in Brooks that the foregoing "principle applies even when contractual terms bind a party to a seemingly harsh or out of the ordinary bargain[.]" Id. We added:
Contracts are to be construed in accordance with the plain meaning of the words contained therein.... It is never the role of a trial court to rewrite a contract to make it more reasonable for one of the parties or to relieve a party from what turns out to be a bad bargain.... A fundamental tenet of contract law is that parties are free to contract, even when one side negotiates a harsh bargain .
Id. (emphasis added) (internal citations omitted) (quoting Barakat v. Broward Cty. Hous. Auth. , 771 So. 2d 1193, 1195 (Fla. 4th DCA 2000) ); see also Casto v. Casto , 508 So. 2d 330, 334 (Fla. 1987) ("[T]he fact that one party to the agreement apparently made a bad bargain is not a sufficient ground, by itself, to vacate or modify a settlement agreement."); Suess v. Suess , 289 So. 3d 525, 531 (Fla. 2d DCA 2019) (holding that "the trial court erred in rewriting the parties’ [marital settlement agreement] to include the ‘marital asset’ cut-off date provided in section 61.075(7) to comport with the trial court's notions of reasonableness, equity, or common sense").
III.
Unquestionably, the Letter of Understanding drove a harsh bargain, but it was not within the power of the trial court to create an equitable remedy when none was permitted under the terms of the contract. The language of the agreement was capable of only one interpretation—and we paraphrase: if Rollison defaults, it gets "NOTHING." Accordingly, we are compelled to reverse the Order Denying Rehearing and the Final Judgment, to the extent it awarded Universal only those damages incurred as Rollison moved forward, yet failed to fulfill its contractual obligations. Rather, we remand the case with instructions that the trial court enter a final judgment awarding Universal the sum of $69,000, plus $2,444.93, or $71,444.93, in damages.
We affirm, without comment, the Final Judgment as it pertains to Appellee Michael J. Rollison.
REVERSED and REMANDED .
Ray and Tanenbaum, JJ., concur.