Opinion
Case No. 6:01-cv-1285-Orl-19JGG
September 10, 2002
REPORT AND RECOMMENDATION
On September 9, 2002, the Court heard oral argument on the following motions, and recommends disposition of those motions as follows: MOTION: PLAINTIFF FPF, INC.'S MOTION PARTIAL SUMMARY JUDGMENT AGAINST DEFENDANT PAY PLAN, INC. AS TO LIABILITY UNDER COUNT VIII OF THE FIRST AMENDED COMPLAINT FILED: RECOMMENDATION: DENIED. MOTION: PLAINTIFF FPF, INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT AGAINST DEFENDANT CREATIVE MANAGEMENT, INC. AS TO LIABILITY UNDER COUNT X OF THE FIRST AMENDED COMPLAINT FILED: RECOMMENDATION: DENIED MOTION: PLAINTIFF FPF, INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT AGAINST DEFENDANTS MICHAEL GRASON, COLETTA GRASON, CARLOS QUINTELA UNDER COUNT XII OF FIRST AMENDED COMLAINT FILED: RECOMMENDATION: DENIED. MOTION: DEFENDANT PAY PLAN, INC. AND DEFENDANT QUINTELA'S MOTION FOR SUMMARY JUDGMENT FILED: RECOMMENDATION: DENIED. MOTION: DEFENDANT AAAA AUTO INSURANCE AND DEFENDANT GRASON'S MOTION FOR SUMMARY JUDGMENT AS TO COUNTS VI AND VII OF THE FIRST AMENDED COMPLAINT FILED: RECOMMENDATION: DENIED as moot. MOTION: PLAINTIFF FPF, INC.'S UNOPPOSED MOTION FOR CASE MANAGEMENT CONFERENCE BEFORE THE TRIAL JUDGE FILED: RECOMMENDATION: DENIED as moot (withdrawn at hearing).
[Docket No. 79] June 27, 2002 (referred July 3, 2002) [Docket No. 80] June 27, 2002 (referred July 3, 2002) [Docket No. 81] June 27, 2002 (referred July 3, 2002) [Docket No. 86] July 1, 2002 (referred July 3, 2002) [Docket No. 88] July 3, 2002 (referred July 3, 2002) [Docket No. 73] June 3, 2002 (referred June 7, 2002) I. INTRODUCTION A. The PartiesPlaintiff FPF, Inc. is a premium finance company incorporated in Colorado, with its principal place of business in Colorado. Defendant AAAA Auto Insurance of Orlando, Inc. d/b/a Grason Insurance is a defunct insurance broker. Defendant AAAA Auto Insurance is a Florida corporation that was administratively dissolved on September 21, 2001 by the Secretary of State. Docket No. 63. AAAA Auto Insurance's principal place of business was in Florida, but the corporation continues to exist solely for the purpose of winding up and liquidating its business within the meaning Fla. Stat. Ann. § 607.1405. Docket No. 63. AAAA Auto Insurance has not filed articles of dissolution under Fla. Stat. Ann. § 607.1403, and has not filed for bankruptcy. Docket No. 63. Defendant Michael Grason is the President and a director of AAAA Auto Insurance.
Defendant Pay Plan, Inc. is a premium finance company owned by defendants Michael Grason and Coletta Grason, both citizens of Florida. Pay Plan is a Florida corporation with its principal place of business in Miami, Florida. Pay Plan's directors and officers include defendants Coletta Grason and Carlos Quintela. Pay Plan has no office or employees. Rather, Pay Plan uses the office and employees of defendant Creative Finance Management, Inc., a Florida corporation that is owned by defendant Carlos P. Quintela and based in Miami, Florida. B. The Direct Grason Portfolio
In the pretrial stipulation, the parties agree that this Court has subject matter jurisdiction over this case through diversity of citizenship and federal question arising under the RICO statute. 28 U.S.C. § 1331-32; 18 U.S.C. § 1961-68. Docket No. 127 at 2.
As an insurance broker, AAAA Auto Insurance sold insurance policies issued by various insurance carriers (e.g. Progressive Specialty, AIG, Zurich Insurance, Scottsdale Insurance) to its customers, the insureds. Many AAAA Auto Insurance customers preferred to pay their insurance premiums over time instead of in a lump sum. FPF, Inc. would agree to pay the full premium to the broker (AAAA Auto Insurance), and then to collect the scheduled payments from the insureds, which payments included a finance charge for FPF, Inc. (e.g., 16.75% APR).
When a customer wished to finance premium payments over time, AAAA Auto Insurance would prepare and ask the customer to sign an Insurance Premium Finance Agreement ["IPFA"] with FPF, Inc. AAAA Auto Insurance would fax the signed IPFA to FPF, Inc. FPF, Inc. would then wire money representing the lump sum premium (less any cash deposit) directly into AAAA Auto Insurance's bank account. According to FPF, Inc., the insurance company would "hold" an unearned premium that secured or collateralized FPF, Inc.'s loan to the customer. Docket No. 127 at 3. If the customer failed to pay his premium finance payments, the insurance policy is cancelled, and the unearned portion of the premium is refunded to FPF, Inc., often through AAAA Auto Insurance. Docket No. 127 at 3. According to FPF, Inc., AAAA Auto Insurance was required to forward to FPF, Inc. any refund received from the insurance company. Docket No. 127 at 3.
FPF, Inc. kept a portfolio of the IPFAs (and resulting premium finance accounts) received directly from AAAA Auto Insurance d/b/a Grason Insurance between December 2000 and May 2001 ["Direct Grason Portfolio"]. FPR, Inc. claims that AAAA Auto Insurance prepared many of the IPFAs using incorrect or false names of insureds, incorrect or false names of insurance companies, and incorrect or false policy numbers, and also failed to refund unearned premiums to FPF, Inc. after the policies were cancelled. FPF, Inc. contends that nearly all of the AAAA Auto Insurance customer accounts in the Direct Grason Portfolio are in default, and that those insureds owe FPF, Inc. approximately $537,765.
C. The Pay Plan Portfolio
Between October 2000 and June 2001, AAAA Auto Insurance also provided FPF, Inc. premium financing to some of its insurance customers indirectly through defendants Pay Plan, Inc. and Creative Finance Management, Inc. AAAA Auto Insurance would prepare the IPFA for its customer. Creative Finance would fax the signed IPFA to FPF, Inc., and FPF, Inc. would then pay the lump sum premium. The Sale and Assignment Agreement between FPF, Inc. and Pay Plan dated August 29, 2000, together with the Premium Receivable Servicing Agreement dated August 29, 2000 between FPF, Inc and Creative Finance Management, Inc., describe the parties' entire agreement.
FPF, Inc. kept a portfolio of the IPFAs received through Pay Plan and Creative Finance ["Pay Plan Portfolio"]. FPF, Inc. claims that AAAA Auto Insurance prepared many of the IPFAs in the Pay Plan Portfolio using incorrect or false names of insureds, incorrect or false names of insurance companies, and incorrect or false policy numbers, and also failed to refund unearned premiums to FPF, Inc. after the policies were cancelled. After discovering these problems with the Pay Plan Portfolio in May 2001, FPF, Inc. contends that it began issuing lump sum premium payments to AAAA Auto Insurance and to the insurance carrier as dual payees, but that AAAA Auto Insurance nevertheless deposited some of those checks without endorsement. FPF, Inc. further contends that insureds in the Pay Plan Portfolio owe FPF, Inc. approximately $1,605,849.
D. The Guarantors
Defendants Michael Grason, Coletta Ida Grason, and Carlos P. Quintela signed as guarantors on the Sale and Assignment Agreement between FPF, Inc. and Pay Plan dated August 29, 2000. Docket No. 79, Exhibit 1 ("AGREED TO WITH RESPECT TO SECTION 6(b):" followed by the three signatures as individuals). The sale agreement defines the term "Guarantor" as "each guarantor of Seller's repurchase obligations as described in Section 6(b) of this Agreement listed in Schedule A attached hereto, if any." Docket No. 79, Exhibit 1 at 3. Schedule A to the agreement specifies that "Guarantors" means Michael Grason and Coletta Ida Grason, whose address is 4333 Woodtree Lane, Orlando, FL 32835, and Carlos P. Quintela, whose address is 201 Crandon Blvd, #523, Key Biscayne, FL 33149.
Section 6(b) provides, in pertinent part:
Each Guarantor (jointly and severally if more than one Guarantor) hereby agrees to repurchase (i) the Repurchase Property referred to in Section 6(a) upon the failure of Seller to do so, and (ii) any Premium Receivable originated in a fraudulent manner. No other personal recourse guarantee or indemnification shall apply to the Guarantors under this Agreement.
Docket No. 79, Exhibit 1 at 8. Section 6(a) refers, in pertinent part, to Repurchase Property as follows:
Not later than (5) Business Days after notice from FPF, Seller shall repurchase from FPF any Premium Receivables and other related Conveyed Property (collectively, the "Repurchase Property") (i) that does not comply in all respects with the Seller's representations and warranties described in Section 11 of this Agreement, or (ii) for which the Required Documents have not been delivered have not been timely delivered to FPF. The amount payable to the Seller by FPF for the Repurchase Property shall be equal to the Repurchase Price.
Docket No. 79, Exhibit 1 at 8. Thus, the contract required the guarantors to repurchase from FPF any premium receivables that failed to meet the specified eligibility characteristics as of the date of sale. Docket No. 79 (Exhibit 1, § 11).
II. THE LAW A. Standard for Summary Judgment
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initial burden of showing the Court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial. Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Clark v. Coats Clark, Inc., 929 F.2d 604 (11th Cir. 1991). A moving party discharges its burden on a motion for summary judgment by "showing" or "pointing out" to the Court that there is an absence of evidence to support the nonmoving party's case. Celotex, 477 U.S. at 325. Rule 56 permits the moving party to discharge its burden with or without supporting affidavits, and to move for summary judgment on the case as a whole or on any claim. Id. When a moving party has discharged its burden, the non-moving party must then "go beyond the pleadings," and by its own affidavits, or by "depositions, answers to interrogatories, and admissions on file," designate specific facts showing that there is a genuine issue for trial. Id. at 324.
In determining whether the moving party has met its burden of establishing that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law, the Court must draw inferences from the evidence in the light most favorable to the non-movant and resolve all reasonable doubts in that party's favor. Spence v. Zimmerman, 873 F.2d 256 (11th Cir. 1989). The Eleventh Circuit has explained the reasonableness standard:
In deciding whether an inference is reasonable, the Court must "cull the universe of possible inferences from the facts established by weighing each against the abstract standard of reasonableness." [citation omitted]. The opposing party's inferences need not be more probable than those inferences in favor of the movant to create a factual dispute, so long as they reasonably may be drawn from the facts. When more than one inference reasonably can be drawn, it is for the trier of fact to determine the proper one.WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir. 1988).
Thus, if a reasonable fact finder evaluating the evidence could draw more than one inference from the facts, and if that inference introduces a genuine issue of material fact, then the court should not grant the summary judgment motion. Augusta Iron and Steel Works v. Employers Insurance of Wausau, 835 F.2d 855, 856 (11th Cir. 1988). A dispute about a material fact is "genuine" if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52.
The Honorable Patricia C. Fawsett entered a Case Management and Scheduling Order in this case on February 11, 2002. Docket No. 38. Judge Fawsett ordered the parties to file with any motion for summary judgment a concise statement of the material facts as to which the moving party contends there is no genuine issue for trial. Docket No. 38 at 6, ¶ H (1). Each memorandum in opposition to a motion for summary judgment must include a concise statement of the material facts as to which the opposing party contends there exists a genuine issue for trial. The parties must provide pinpoint citations to the pages and lines of record supporting each material fact. General references to a deposition are inadequate. According to Judge Fawsett's order, material facts set forth in the statement required to be served by the moving party "will be deemed admitted for the purposes of the motion unless controverted by the opposing party's statement." Docket No. 38 at 6, ¶ H (1).
B. Florida Contract Law
Although the contracts at issue call for the application of Colorado law, the parties have briefed and argued the issues as if Florida law applies. Under Florida law, the elements of a contract are offer, acceptance, and consideration. See Air Products and Chemicals, Inc. v. Louisiana Land Exploration Co., 806 F.2d 1524, 1529 (11th Cir. 1986). It is well settled that the actual language used in the contract is the "best evidence of the intent of the parties and, thus, the plain meaning of that language controls." See Rose v. M/V "Gulf Stream Falcon," 186 F.3d 1345, 1350 (11th Cir. 1999); see also American Med. Int'l, Inc. v. Scheller, 462 So.2d 1, 7 (Fla. 4th D.C.A. 1984) (stating that where a contract is clear and unambiguous and does not involve any absurdities or contradictions, it is the best evidence of the intent to the parties, and its meaning and legal effect are questions of law for determination by the court alone).
In Section 28 of the Sale and Assignment Agreement, the corporate parties agreed that "THIS AGREEMENT AND ANY RELATED DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE SUBSTANTIVE LAWS OF THE STATE OF COLORADO WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS." Docket No. 79 [Exhibit 1 at 18, Section 28]. Furthermore, FPF, Inc. and Pay Plan "IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT." The Premium Receivable Servicing Agreement contains identical clauses. See Docket No. 80, Exhibit 1 at §§ 7.07 and 7.09.
Issues of contract interpretation are generally questions of law and, thus, properly resolved on summary judgment. See Lawyers Title Ins. Corp. v. JDC (America) Corp., 52 F.3d 1575, 1580 (11th Cir. 1995). However, the existence of a contract is a question of fact to be determined by consideration of all the facts and circumstances. Mastner Palletizer Systems, Inc. v. T.S. Ragsdale Co., 725 F. Supp. 1525, 1531 (D. Colo. 1989); Green v. City of Hamilton, Housing Authority, 937 F.2d 1561, 1566 (11th Cir. 1991) ("allegations and affidavits raise genuine issues of fact regarding the existence of an enforceable contract for "permanent" employment under Alabama law"); Consolo v. A.M.K. Corp., 344 So.2d 1285, (Fla. 3rd D.C.A. 1977) (finding that summary judgment was precluded by existence of material issues of fact related to questions of whether contract existed between parties and whether various conditions precedent attached to negotiations were to be fulfilled as a prerequisite to the existence of the contract itself or were to be fulfilled merely as a prerequisite to the performance of the contract). A guaranty is a collateral promise to answer for the debt or obligation of another. Federal Deposit Insurance Corp. v. University Anclote, Inc., 764 F.2d 804, 806 (11th Cir. 1985). Under Florida law, rules applicable to contracts generally apply to guaranty contracts. Warner v. Cladwell, 354 So.2d 91, 96 (Fla. 3d D.C.A. 1977).
III. APPLICATION A. FPF. Inc.'s Motions for Partial Summary Judgment on Liability [Docket Nos. 79.80.81]
1. Pay Plan, Inc.
Plaintiff FPF, Inc. moves for partial summary judgment against defendant Pay Plan, Inc. as to liability on Count VIII (Breach of Contract re the Sale and Assignment Agreement) of the [Second] Amended Complaint. Docket No. 79. In Count VIII, FPF, Inc. claims that Pay Plan breached the Sale and Assignment Agreement between FPF, Inc. and Pay Plan dated August 29, 2000. Docket No. 107 at 26. Specifically, FPF, Inc. claims that Pay Plan made false representations and warranties in the Sale and Assignment Agreement, and that Pay Plan breached its duty under Section 6 of the Sale and Assignment Agreement to "repurchase from FPF all premium receivables which do not comply with the representations and warranties" in the Sale and Assignment Agreement. Second Amended Complaint, Docket No. 107 at 26, ¶¶ 83-84.
FPF, Inc.'s motion in fact seeks summary judgment as to Count VIII (Breach of Contract) of the First Amended Complaint [Docket No. 23, filed December 12, 2001]. FPF, Inc. filed a Second Amended Complaint on July 26, 2002, Docket No. 107, which remained the operative pleading until it was deemed merged into the Joint Final Pretrial Statement on September 3, 2002. See Local Rule 3.06(e). Accordingly, this report and recommendation treats all motions for summary judgment as directed to the corresponding causes of action in the Second Amended Complaint.
In its motion for partial summary judgment, FPF, Inc. claims that Pay Plan falsely represented on August 29, 2000 that every premium receivable that it will sell to FPF, Inc. will have two specific eligibility characteristics as of the date of sale. Docket No. 79 [Exhibit 1, Section 11]. The first characteristic is that "Each Premium Receivable is evidenced by proof of payment to the Issuing Insurance Company or its designated general Agent equal to an amount not less than the original principal amount of such Premium Receivable. . .". Docket No. 79 [Exhibit 1 at 12, Section 11(k)]. The second characteristic is that "The information and related documents regarding the Premium Receivable being Sold to FPF is true and correct in all material respects. . . ." Docket No. 79 [Exhibit I at 12, Section 11(1)]. FPF, Inc. argues that it is undisputed that Pay Plan failed to keep evidence of payment to the insurance carriers, and that many of the Pay Plan IPFAs were not "true and correct in all material respects" because they omitted the identities of the insurance carriers and the numbers of the policies. Docket No. 79 at 3. FPF, Inc. concludes that Pay Plan therefore materially breached Sections 11(k) and 11(1) of the Sale and Assignment Agreement.
Lastly, Pay Plan agreed that "Not later than five (5) Business Days after notice from FPF, Inc., Seller shall repurchase from FPF any Premium Receivables . . . that does [sic] not comply in all respects with Seller's representations and warranties described in Section 11 of this Agreement . . ." Docket No. 79 [Exhibit 1 at 8, Section 6(a)]. FPF, Inc. alleges that it gave notice to Pay Plan, but that Pay Plan refused to repurchase the ineligible premium receivables. Docket No. 79 at 3. FPF, Inc. concludes that Pay Plan therefore materially breached Section 6(a) of the Sale and Assignment Agreement.
FPF, Inc. has included in its motion for summary judgment a statement of the conclusions as to which FPF, Inc. contends there is no genuine issue for trial. See Docket No. 38 at 6, Case Management and Scheduling Order, ¶ H (1). FPF, Inc. attaches to its motion a memorandum of law that cites the Sale and Assignment Agreement, as well as several pages of the deposition of Jacqueline M. Lilly, President of Creative Finance. Docket No. 79, 83. Defendant Pay Plan, Inc. filed a memorandum in opposition to partial summary judgment on Count VIII. Docket No. 92. Pay Plan refers the Court to Pay Plan's own motion for summary judgment. Pay Plan argues that Michael Grason has accepted responsibility and exonerated Pay Plan, and that FPF, Inc. is equitably estopped from proceeding against Pay Plan because FPF, Inc. has not dealt fairly with Pay Plan. Docket No. 92 at 9-10.
The facts as to whether Pay Plan materially breached the servicing agreement as charged in Count VIII remain in dispute. The sale agreement and the testimony of Lilly are inadequate to show that there are undisputed facts supporting FPF, Inc.'s conclusions that Pay Plan has materially breached the contract. of hundreds or thousands of premium receivable accounts in the Pay Plan Portfolio, the record contains no evidence as to the number or percentage of the accounts containing ineligible premium receivables. FPF, Inc.'s oral argument that even one error on one IPFA in the Pay Plan Portfolio proves a material breach of the Sale and Assignment Agreement is meritless. The following issue of fact remains for trial: whether Pay Plan, Inc. materially breached its obligations under the Sale and Assignment Agreement with regard to the purchase and sale of premium receivables. See Docket No. 127 at 11, ¶ 8.
2. Creative Finance Management, Inc.
Plaintiff FPF, Inc. moves for partial summary judgment against defendant Creative Finance Management, Inc. as to liability on Count X of the [Second] Amended Complaint (Breach of Contract re the Premium Receivable Servicing Agreement). Docket No. 80. Section 2.14(b)(1) of the Servicing Agreement requires Creative Finance to maintain paid checks and drafts to insurance companies in its files, or immediately available on a computer screen, with respect to each Premium Receivable. Docket No. 80 at 3, Exhibit 1 at 5-6, § 2.14(b)(1) According to FPF, Inc., it is undisputed that Creative Finance failed to maintain the checks and drafts, and that there is no material issue of fact as to whether Creative Finance breached the Servicing Agreement. Docket No. 30 at 3, 4. FPF, Inc. cites to the deposition by Jacqueline M. Lilly, President of Creative Finance, acknowledging that Creative Finance did not keep copies of the checks or drafts. Docket No. 83 at 94; Docket No. 80 at 4-5.
Although § 2.14(b)(1) of the Servicing Agreement does not itself refer to checks or drafts to insurance companies, the section requires Creative Finance to maintain "Copies of the Loan Documents." The Servicing Agreement elsewhere defines "Loan Documents" as including an "original or facsimile copy of the paid or cancelled check or draft payable to the applicable Issuing Insurance Company evidencing payment of an amount equal to or greater than the financed portion of the premium. . ." See Docket No. 80, Exhibit I at 2, Article 1.
Defendant Creative Finance Management, Inc. filed a memorandum in opposition to partial summary judgment on Count X. Docket No. 102. Defendant points to the testimony of Karen Bond, Manager of Risk Analysis at EPE, Inc. Bond performed a favorable due diligence assessment at Creative Management on July 11-12, 2001, and looked at the drafts on file to ensure that they were written to the insurance company or general agent. Docket No. 104 at 91. Creative Management thereby disputes FPF, Inc.'s contention that Creative Finance failed to maintain the drafts. Creative Management further argues that it was FPF, Inc. that retained Creative Management to be FPF, Inc.'s "eyes and ears," and that the real problem was that some policies and insureds did not exist. Docket No. 104 at 125-26. Creative Management concludes that there "exist numerous factual issues in this case about which all parties presently know nothing because the deadline for discovery has expired." Docket No. 102 at 3.
The facts as to whether Creative Management materially breached the servicing agreement as charged in Count X remain in dispute. The servicing agreement and the testimony of Lilly are inadequate to show that there is no material issue of fact that Creative Finance has materially breached the contract. The following issue of fact remains for trial: whether Creative Management, Inc. materially breached its obligations under the Premium Receivable Servicing Agreement with regard to the administration of premium finance agreements. See Docket No. 127 at ll, ¶ 11.
3. Michael Grason, Coletta Grason, and Carlos Quintela
Plaintiff FPF, Inc. moves for partial summary judgment [Docket No. 81] against defendants Michael Grason, Coletta Grason, and Carlos Quintela as to liability on Count XI of the Second Amended Complaint (Breach of Guaranty Obligations) [formerly Count XII of the First Amended Complaint, Docket No 23]. Docket No. 107. Relying on the deposition of Jacqueline Lilly, FPF, Inc. argues that Creative Finance did not know whether receivables were backed by proof of payment to the insurance companies, and did not maintain evidence of proof of payment as required by § 11(k) of the Sale and Assignment Agreement. According to FPF, Inc., the lack of evidence of proof of payment means that Pay Plan materially breached § 6(a) the Sale Agreement, and that the guarantors had a duty to repurchase the receivables under § 6(b) of the sales agreement, which they did not do. Docket No. 81 at 6.
Memoranda in opposition to partial summary judgment on Count XI of the Second Amended Complaint have been filed by defendants Michael Grason [Docket No. 106], Coletta Grason [Docket No. 106, 108], and Carlos Quintela [Docket Nos. 92, 106]. Michael and Coletta Grason argue that FPF, Inc. never informed them of the Seller's failure to pay its debt to FPF, Inc., and that FPF, Inc. never made a demand on the Grasons under the guaranty. FPF, Inc. does not dispute that it made no demand, but argues that no demand is required. Quintela argues that FPF, Inc.'s Senior Vice President Thomas A. Barba assured him that "in no event there would be any personal guaranty involved; there would only be corporate guaranties." Quintela Affidavit, Docket No. 93 at 1. FPF, Inc. responds by pointing to the integration clause in the agreement. Material issues of fact remain for trial as to whether Pay Plan materially breached § 6(a) of the Sale and Assignment Agreement, and as to whether Michael Grason, Coletta Grason, and Carlos Quintela breached their guaranty obligations as to repurchase of the receivables as charged in Count XI.
FPF, Inc. relies on State of Pennsylvania v. Curtiss National Bank, 427 F.2d 395, 401 (5th Cir. 1970) (where a contractual promise to pay money is in terms performable on demand by the promisee, but the duty of performance is otherwise unconditional, a right of action by the promisee is not conditioned on a demand being made) (citing Restatement, Contracts § 264). In this case, § 6(a) of the Sale and Assignment Agreement requires only that the guarantors repurchase the property "upon failure of the Seller to do so." Docket No. 81, Exhibit A at 8, § 6(a). No other preconditions, such as notice and demand, are required. A security agreement is effective according to its terms between the parties, against purchasers of the collateral, and against creditors. See Fla. Stat. §§ 679.2011(1) and 679.1021(1)(ttt).
B. Defendants' Motions for Summary Judgment [Docket Nos. 86, 88]
Defendants Pay Plan, Inc. and Carlos P. Quintela move for summary judgment against plaintiff FPF, Inc. as to liability on Counts VIII (Breach of Contract re Pay Plan) and IX (Negligence and Negligent Misrepresentation re Creative Finance) of the Second Amended Complaint [formerly Counts VII (since dropped), VIII, and XI of the First Amended Complaint]. Docket No. 86. Pay Plan and Quintela's motion seeks summary judgment on FPF, Inc.'s claims against Pay Plan and Quintela.
The motion of Pay Plan and Quintela contains a thorough statement of twenty-seven facts alleged to be uncontested. Docket No. 86 at 4-10. Pay Plan and Quintela allege that Michael Grason has acknowledged sole responsibility for false drafts generated by Grason and that Pay Plan and Quinela are not involved. Docket No. 86 at 2-3, 10, Exhibit M. Pay Plan and Quintela further allege that FPF, Inc. is estopped from recovering on the guaranty. Defendants point to FPF, Inc.'s own neglect in reviewing and detecting the false information supplied by Michael Grason, to FPF, Inc.'s direct relationship with Michael Grason that allowed him to continue his fraud scheme, and to FPF, Inc.'s deliberate concealment of Grason's fraud scheme from Pay Plan and Quintela. Docket No. 86 at 2-3. Lastly, Pay Plan and Quintela point to FPF, Inc.'s own neglect in failing to accept collateral from Michael Grason in order to mitigate losses.
Plaintiff FPF, Inc. opposes Pay Plan's and Quintela's motion for summary judgment. Docket No. 96. FPF, Inc. directly contests seven of the twenty-seven facts alleged to be uncontested. Docket No. 96 at 2-7. It is evident from FPF, Inc.'s responses that material issues of fact remain for trial as to whether Pay Plan and Quintela are liable to FPF, Inc. under Counts VIII (Breach of Contract re Pay Plan) and IX (Negligence and Negligent Misrepresentation re Creative Finance) of the Second Amended Complaint.
Defendants AAAA Auto Insurance and Michael Grason have also moved for summary judgment against plaintiff FPF, Inc. as to liability on Count VI of the Second Amended Complaint (Violations of Florida's Civil Remedies for Criminal Practices Act against AAAA Auto Insurance and Michael Grason) [formerly Counts VI (same) and VII (dropped) of the First Amended Complaint]. Docket No. 88. Defendants allege that FPF, Inc. has failed to give pre-suit notice by way of a written demand for $200 before filing this action for damages under Fla. Stat. § 772.11. Docket No. 88.
Plaintiff FPF, Inc. opposed defendants AAAA Auto Insurance's and Michael Grason's motion for summary judgment on Count VI of the Second Amended Complaint. FPF, Inc. stated that it brought Count VI under Fla. Stat. §§ 772.103 and 772.104 (pertaining to a civil remedy for patterns of criminal activity), and not under Fla. Stat. § 772.11 (pertaining to a civil remedy for theft). Docket No. 91. Therefore, argued FPF, Inc., no notice under § 772.11 is required. At oral argument, defendants withdrew this motion. Defendants' motion [Docket No. 88] therefore should be denied as moot.
IV. CONCLUSION
The motions should be DENIED for the reasons stated above. Failure to file written objections to the proposed findings and recommendations in this report pursuant to 28 U.S.C. § 636 (b)(1) and Local Rule 6.02 within ten days of the date of its filing shall bar an aggrieved party from a de novo determination by the district court of issues covered in the report, and shall bar an aggrieved party from attacking the factual findings on appeal. Any party filing objections to this report and recommendation shall file and serve a copy of the oral argument transcript within fifteen days of this order.