Opinion
Case No. 2D19-4473
05-26-2021
Michael Anthony MORTELLARO, as the personal representative of the Estate of Gloria C. Cooper, a/k/a Gloria Gonzalez Cooper, deceased, Appellant, v. CARIBE HEALTH CENTER, INC., and Ana Dominguez, Appellees.
Raymond N. Seaford of Law Office of Raymond N. Seaford, P.A., Tampa, for Appellant. Mark E. Pena of Law Office of Mark E. Pena, Tampa, for Appellees.
Raymond N. Seaford of Law Office of Raymond N. Seaford, P.A., Tampa, for Appellant.
Mark E. Pena of Law Office of Mark E. Pena, Tampa, for Appellees.
ROTHSTEIN-YOUAKIM, Judge.
Michael Anthony Mortellaro, as the personal representative of the Estate of Gloria C. Cooper, appeals from a final order enforcing a settlement agreement in favor of Appellees, Caribe Health Center, Inc. (Caribe), and Caribe's president, Ana Dominguez. Because the trial court erred in concluding that Caribe's failure to abide by the time limitations set forth in the agreement did not constitute a material breach, we reverse and remand for further proceedings in execution of the Amended Final Judgment.
Cooper passed away during the pendency of the underlying action, and Mortellaro, as personal representative, was substituted as plaintiff. For consistency, however, we refer to Cooper as the plaintiff and appellant.
I. Background
Cooper originally sued Caribe for premises liability. On March 9, 2018, the parties entered into a settlement agreement. Pursuant to the agreement, the trial court entered a $500,000 Final Judgment in favor of Cooper and against Caribe, but the agreement also permitted Caribe to satisfy the Final Judgment in full for $100,000 "only if" it "timely made" thirteen monthly payments. The agreement included a specific payment schedule—with final payment due March 9, 2019—and further provided, in pertinent part:
4. Each payment shall be delivered on or before the 9th day of each month beginning on March 9, 2018, to an address designated by the Plaintiff. ...
5. If a monthly payment is late or does not clear, Plaintiff shall provide Defendant written notice via its registered agent, Ana Dominguez ... and current counsel. Defendant shall have 10 days to cure from the date the written notice is issued by the Plaintiff.
6. If no payment is received from the Defendant within the cure period, Plaintiff, at its option, can declare a default under this agreement and shall have the unfettered ability to seek full execution of the Final Judgment ... [with] all payments received to date being credited solely as payments against the full amount of the Final Judgment.
Caribe's first two monthly payments were three days late and two days late, respectively. In both instances, Caribe promised that the delayed payments were forthcoming, and Cooper refrained from sending the ten-day cure letter. When Caribe failed to make its third payment on May 9, 2018, however, Cooper sent the cure letter the following day. After receiving no payment or communication within the ten-day cure period, Cooper declared a default and moved to add Dominguez as a party to an Amended Final Judgment. Caribe and Dominguez stipulated to entry of the Amended Final Judgment, and Cooper agreed to reinstate the settlement agreement and to accept a late May payment pursuant to the agreement.
Per the settlement agreement, Dominguez was Caribe's personal guarantor for the full amount of the Final Judgment but as indicated above, the original Final Judgment was only against Caribe. Other than adding Dominguez as a party, the Amended Final Judgment was identical to the original Final Judgment.
Caribe's fourth monthly payment was due June 9, 2018. Caribe once again failed to make this payment. On June 11, 2018, Cooper sent a ten-day cure letter but again received no payment or communication within the cure period.
On June 22, 2018, Cooper sent Caribe's counsel a letter warning: "Before taking action to fully enforce the final judgment, I am contacting you to determine if your client has decided to no longer make any payments towards the amount which was agreed to in the Settlement Agreement." Counsel responded that his clients "seem[ed] to have 'forgotten' the deadlines" and said that he would contact them. On June 27, 2018, consistent with paragraph six of the settlement agreement, Cooper notified Caribe:
The prior Settlement Agreement, having been breached, is no longer in effect. The limitations imposed by the Settlement Agreement on collecting the full amount owed under the Final Judgment and the Amended Final Judgment are no longer in effect. All past and future payments will be credited against the principal owed on the Amended Final
Judgment, then, once the principal has been recovered, the remaining payments will be credited against interest, until the Amended Final Judgment is fully satisfied.
The letter stated further:
If your clients wish to propose a new settlement agreement and payment plan for paying less than the full amount of the Amended Final Judgment, please provide me with the same. In order for any new payment plan to be accepted, all financial discovery will have to first be completed and collateral will have to be identified and secured.
That same day, Cooper received a $10,000 payment and an email from Caribe's counsel simply asking, "Can [I] not respond to the discovery requests?"
Over the next several months, Caribe continued to make payments at more or less monthly intervals, until a total of $90,000 had been paid. During this time, Caribe neither argued that the settlement agreement remained in effect nor conditioned payment upon reinstatement of the agreement. Likewise, Cooper did not offer to reinstate the agreement in exchange for any of the payments. To the contrary, all of the receipts that Cooper provided to Caribe indicated that the payment had been received "in partial satisfaction of the Amended Final Judgment."
Payments were made on August 10, 2018; September 20, 2018; October 31, 2018; November 8, 2018; and December 8, 2018.
On December 4, 2018, Caribe's counsel sent an email to Cooper's counsel that said, "TODAY I RECEIVED THE FINAL PAYMENT OF 10K. I WILL DEPOSIT THE SAME TODAY OR TOMORROW AND SEND IT OVER WHEN IT CLEARS. I WOULD HOPE TO HAVE THE RELEASE FROM JUDGEMENT/DISMISSAL SHORTLY AFTER." Cooper's counsel responded with a multipage letter rejecting the tender of the "final payment" and recounting Caribe's default and material breach and Cooper's uncontested notices to Caribe that all payments had been credited against the Amended Final Judgment. On December 6, 2018, Caribe sent Cooper an eCheck bearing the notation, "Caribe Payment 10 (PIF) full and final payment." Cooper did not negotiate the check.
Thereafter, Caribe filed a motion to enforce the settlement agreement, which Cooper opposed. At the hearing on the motion, Caribe argued that Cooper had waived the June 2018 default by accepting late payments after the default occurred; alternatively, Caribe's late payments should be excused based on the parties' "course of dealing" and the fact that Caribe had tendered the final payment early. Agreeing with Caribe, the trial court stated at the hearing:
Along with their motion and response, the parties had submitted the settlement agreement, various emails, and other correspondence. At the hearing, they generally agreed to the facts, and the trial court took no additional evidence.
The Court is going to grant the motion to enforce the settlement agreement. The basis of the ruling is that the failure to pay on the June [9, 2018,] payment, ... was not a material breach of the contract, given the later payments, including June 27th, August 10, and the following payments.
Additionally, the court's written order provided:
The court finds that the Plaintiff accepted late payments from the inception of the agreement pay-out. The court further finds therefore, that, in this context, the tardiness of the June payment was not a material breach of the Settlement Agreement.
II. Analysis
We review de novo the trial court's interpretation of the parties' settlement agreement. Marlin Yacht Mfg., Inc. v. Nichols, 254 So. 3d 1022, 1024 (Fla. 4th DCA 2018) ("[S]ettlement agreements are interpreted like a contract and reviewed de novo." (citing Barone v. Rogers, 930 So. 2d 761, 764 (Fla. 4th DCA 2006) )). And we start, as always, with the language of the agreement itself. See Kozel v. Kozel, 302 So. 3d 939, 948 (Fla. 2d DCA 2019) ("Because we interpret a settlement agreement in a dissolution proceeding the same way we interpret any other contract, we use the standard rules of contract interpretation to do this work. That means that we look first to the ordinary meaning of the language of the contract and, where that language is unambiguous, we will ordinarily construe the contract as the parties wrote it." (first citing Rector v. Rector, 264 So. 3d 282, 286 (Fla. 2d DCA 2019) ; and then citing Murley v. Wiedamann, 25 So. 3d 27, 29–30 (Fla. 2d DCA 2009) )).
In this case, the agreement indicated that Cooper "agree[d] to accept [the] sum of $100,000 in full satisfaction of the Final Judgment only if ... payments are timely made " and mandated that "[e]ach payment shall be delivered on or before the 9th day of each month." (emphasis added). It provided that if a payment was not received within the ten-day cure period, Cooper could declare a default at her option and had "the unfettered ability to seek full execution of the Final Judgment" as her remedy. In light of this express language, we readily conclude that Caribe's failure to abide by the time limitations for payment constituted a material breach of the agreement. See Treasure Coast, Inc. v. Ludlum Constr. Co., 760 So. 2d 232, 234–35 (Fla. 4th DCA 2000) ("[T]he trial court erred in failing to enforce the unambiguous terms of the settlement agreement, ... [which] clearly contained the express provision for payment of a sum certain on a specific date. In providing appellant with a specific remedy, judgment for the entire amount due and owing in the event of nonpayment, the parties essentially agreed that time was of the essence."); see also Atlanta Jet v. Liberty Aircraft Servs., LLC, 866 So. 2d 148, 150 (Fla. 4th DCA 2004) (defining material breach and stating that before failure to perform by a specific time can constitute a material breach, "it is necessary to conclude that time was of the essence"); Sublime, Inc. v. Boardman's Inc., 849 So. 2d 470, 471 (Fla. 4th DCA 2003) ("As a general rule, time is considered to be of the essence where ... notice has been given to the defaulting party requiring that the contract be performed within a stated time, which must be a reasonable time according to the circumstances." (citing Blaustein v. Weiss, 409 So. 2d 103, 105 (Fla. 4th DCA 1982) )); Hufcor/Gulfstream, Inc. v. Homestead Concrete & Drainage, Inc., 831 So. 2d 767, 769 (Fla. 4th DCA 2002) ("A settlement agreement should be strictly enforced where time is made of the essence." (citing Rose v. Ditto, 804 So. 2d 351 (Fla. 4th DCA 2001) )).
Moreover, to the extent that the trial court concluded that Cooper's "accept[ance of] late payments from the inception" effectively rewrote that express language so that Caribe's failure was not a material breach of the agreement, that conclusion finds no support in the undisputed facts. We do not disagree that subsequent conduct by the parties can modify the terms in a contract, see St. Joe Corp. v. McIver, 875 So. 2d 375, 382 (Fla. 2004), but nothing about Cooper's conduct—either before or after the first default in May—indicated anything other than an intent to enforce the time limitations of the settlement agreement as written. Although Cooper refrained from sending ten-day cure letters when Caribe's first two payments were not received on the due date, Caribe had quickly assured Cooper that those payments were forthcoming and the payments were in fact just a few days tardy. Moreover, Cooper's acceptance of those two tardy payments out of an anticipated thirteen payments did not establish "a sufficient pattern of acceptance of late payments and forbearance" by Cooper, and certainly not with respect to the much later third and fourth payments that followed. See Kelly Tractor Co. v. R.J. Canfield Contracting Inc., 579 So. 2d 261, 264 (Fla. 4th DCA 1991) (holding that Kelly Tractor Company's acceptance of two late payments of twenty-one days and thirty-four days on a twelve-month lease failed to establish "a sufficient pattern of acceptance of late payments and forbearance by Kelly Tractor in the exercise of its rights under the lease to support appellees' defense of estoppel").
The trial court did not explain the legal basis for its conclusion, but we assume that because the court stated that the breach was not material rather than that the breach, material or not, was waived, the court had determined that the parties' course of conduct had modified the time limitations under the agreement rather than that Cooper had waived Caribe's failure to abide by those limitations. Compare St. Joe Corp. v. McIver, 875 So. 2d 375, 382 (Fla. 2004) ("Under Florida law, the parties' subsequent conduct ... can modify the terms in a contract." (citing In re Gen. Plastics Corp., 158 B.R. 258 (Bankr. S.D. Fla. 1993) )), with Am. Somax Ventures v. Touma, 547 So. 2d 1266, 1268 (Fla. 4th DCA 1989) ("We need not decide whether the failure to give written notice of extension of closing was a material breach, because in this case the evidence is undisputed that appellees waived this breach."). For purposes of the arguments and analysis at least in this case, however, we find that to be a distinction without a difference.
Indeed, when Caribe failed to timely make the third payment in May, Cooper sent the ten-day cure letter. When that elicited no response, Cooper exercised her option to declare a default, which she rescinded only after Dominguez agreed to be bound as a party to an Amended Final Judgment. And when Caribe then failed to timely make the next payment, Cooper again exercised her option to declare a default, this time also exercising her "unfettered ability to seek execution of the final judgment."
At the hearing, Cooper's counsel explained his reasoning behind joining Dominguez as a party:
[T]he bottom line is that if Ms. Dominguez was added as a defendant too, and an amended final judgment was entered, providing security against future defaults—because, as [Caribe's counsel] said, business can go out of business pretty quick, but Ms. Dominguez was 100 percent owner of the business, so it gave us someone else to go to in the event there was a default in the future.
....
So if they were going to provide additional security, through an amended final judgment, through this stipulation, we agree we would not declare a default and would continue on and reinstate the settlement agreement.
Contrary to Caribe's contention on appeal, given Cooper's "unfettered ability to seek execution of the final judgment," Cooper was not required to obtain Caribe's consent before doing so. And there is no support for Caribe's contention and the trial court's suggestion that Cooper was obligated to reject the payments that Caribe sent after it defaulted: pursuant to the Amended Final Judgment, Caribe and Dominguez now owed Cooper $500,000. Cooper notified Caribe in June, "All past and future payments will be credited against the principal owed on the Amended Final Judgment, then, once the principal has been recovered, the remaining payments will be credited against interest, until the Amended Final Judgment is fully satisfied." Every receipt for subsequent payment expressly stated that the payment was being accepted exclusively in partial satisfaction of the Amended Final Judgment rather than the settlement agreement. Nonetheless, Caribe continued to send money.
Finally, notwithstanding the above, Caribe argues that affirmance is warranted because, in short, the trial court recognized that penalizing Caribe for a few late payments would be unfair. But even if the court was correct, it was not at liberty to rewrite the settlement agreement to relieve Caribe from the consequences of its bargain. See Int'l Expositions, Inc. v. City of Miami Beach, 274 So. 2d 29, 30–31 (Fla. 3d DCA 1973) ("The law is quite clear that courts may not rewrite, alter, or add to the terms of a written agreement between the parties and may not substitute their judgment for that of the parties in order to relieve one from an alleged hardship of an improvident bargain." (citing Home Dev. Co. of St. Petersburg v. Bursani, 178 So. 2d 113 (Fla. 1965) )).
And here we cannot even say that the bargain was "improvident," given that it required only that Caribe make thirteen timely payments totaling $100,000 to avoid being liable for an additional $400,000.
Accordingly, for the reasons set forth above, the trial court erred in concluding that Caribe did not materially breach the settlement agreement. We therefore reverse the order enforcing the agreement and remand for further proceedings in execution of the Amended Final Judgment.
Reversed and remanded.
VILLANTI and ATKINSON, JJ., Concur.