FI L ED
U.S. COURT OF APPEAL S

EL EVENTH CI RCUI T MAY 12, 2009

THOMAS K. KAH

N
CL ERK [DO NOT PUBLISH]

IN THE UN ITED STATES COURT OF APPEALS

FOR THE ELE VENTH CIRCUIT

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No. 0 8- 16 85 0
Non -Arg um en t Ca le nd ar

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D.C. Dock et No. 0 7- 00 10 4- CV-ORL-2 8DAB

COUNTRY INNS & SUITES BY CARLSON, INC.,
a Mi nn es ot a co rp or at io n,

Pl ai nt iff -Ap pe ll ee,

ve rs us

INTERSTATE PROPERTIES, LLC,
a Fl or id a li m it ed li ab il it y co m pa ny, W ILLIAM ABRUZZINO, an in di vi du al

,

Defen da nt s- App el la nt s.

__ __ __ __ __ __ __ __ __ __ __ __
App eal fro m

th e Uni te d S ta te s Di st ric t Co ur t fo r th e Mi dd le Dis tri ct of F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Ma y 12 , 20 09 )

Befo re CARNES, WILSON and COX, Circ ui t J ud ge s.

PER CURI AM:In te rs ta te Proper ties, LLC (“ In te rs ta te ”) own ed a ho te l in Oran ge Ci ty, Fl or id a.

In Feb ru ary 2 00 4, In te rs ta te en te red in to a Lice ns e Agr eem en t wi t h C o u n t r y In n &

Su it es by Carl so n (“ Co un try”), pu rs ua nt to whi ch In te rs ta te pr om is ed to op erat e th at

ho te l a s a Co un try fr an ch is e fo r fif te en y ears

. W il li am Abr

uz zi no , I nt ers ta te ’s s ol e

own er, pe rs on al ly gu aran te ed pa y m en t of al l am ou nt s du e Co un try un de r th e Lice ns e

Agr eem en t. In Octo be r 20 06

, In te rs ta te br each ed th e Lice ns e Agr eem en t by se ll in g

it s Oran ge Ci ty ho te l to a pu rch as er who di d no t c o n t i n u e t o o p erat e th e ho te l as a

Co un try ho te l. Co un try de cl ared In te rs ta te in de fau lt an d, whe n In te rs ta te di d no t pa y

Co un try al l of th e m on ie s Co un try cl ai m ed it was owe d, Co un try su ed In te rs ta te an d

Abr uz zi no (co ll ect iv el y , “ The In te rs ta te Defen da nt s” ) fo r th os e m on ie s an d th e ne w

own er o f th e p ro pe rty for t rad em ark in fri ng em en t.

The co m pl ai nt co nt ai ne d se ve n co un ts

. Each co un t, wit h th e ex cep ti on of

Co un t II– Co un try’ s cl ai m ag ai ns t th e In te rs ta te Defen da nt s fo r li qu id at ed da m ag es

–

was res ol ve d b y t he pa rti es

. Mo st of th e cl ai m s were vo lu nt ari ly di sm is se d. The

di st ric t co ur t en te red jud g men t fo r Co un try on Co un t I, pu rs ua nt to an ag reem en t

be twee n t h e p a r t ie s, an d Co un t II, pu rs ua nt to th e co ur t’s ru li ng th at Co un try was

en ti tl ed to su m

m ary jud gm en t on th at co un t. The In te rs ta te Defen da nt s no w ap pe al

th e jud gm en t, arg ui ng on ly th at th e di st ric t co ur t erre d in gr an ti ng su m m ary jud gm en t

2to Co un try on Co un t II be cau se th e li qu id at ed da m ag es cl au se in th e Lice ns e

Agr eem en t i s u ne nf

or ceab le

.

Thi s co ur t rev ie ws a di st ric t co ur t’s gr an t of su m m ary jud g men t de no vo ,

ap pl y in g th e sa m e le ga l st an da rd s u s e d b y th e di st ric t co ur t. Se e, e.g

. , Hil bu rn v.

Mur at a Elec s. N. Am., In c. , 18 1 F.3 d 1 22 0, 12 25 (1 1t h Ci r. 19 99 ). Su m m ary

jud gm en t is ap pr op ria te whe re “ ‘the re is no ge nu in e is su e as to an y m at eri al fact an d

th e mo v i n g p art y is en ti tl ed to a jud gm en t as a m at te r of la w.’ ” W oo de n v. Bd. of

Reg en ts of th e Uni v. Sy s. of Ga.

, 24 7 F.3 d 12 62

, 12 71 (1 1t h Ci r. 20 01 ) (q uo ti ng Fed

.

R. Ci v. P. 5 6( c)).

The di st ric t co ur t co rrec tl y id en ti fie d th e te st un de r Fl or id a l a w a s t o whe n a

li qu id at ed da m ag es pr ov is io n will be up he ld . “ Fi rs t, t he da m ag es co ns eq ue nt up on

a br each m

us t no t be read il y as cert ai na bl e. Seco nd

, th e su m st ip ul at ed to be fo rfei te d

m us t no t be so gr os sl y di sp ro po rti on at e to an y da m ag es th at m ig ht reas on ab ly be

ex pe ct ed to fo ll ow fro m a br each as to sh ow th at th e pa rti es co ul d ha ve in te nd ed on ly

to in du ce fu ll pe rfo rm an ce, rat he r th an to l i q u i d at e th ei r da m ag es .” Lef emin e v.

Bar on , 57 3 So

. 2d 32 6, 32 8 (Fl a. 19 91 ). The In te rs ta te Defen da nt s ha ve no t arg ue d,

he re or in th e di st ric t co ur t, th at th e fir st pa rt of th is te st is no t m et

. Rat he r, th ey arg ue

th at th e li qu id at ed da m ag es pr ov is io n in th e Lice ns e Agr eem en t fai ls th e se co nd pa rt

of th e te st be cau se it : (1 ) do es no t ta ke in to acco un t th e ti m e du rin g th e co nt ract te rm

3at whi ch th e br each oc cu rs an d, th eref or e, co ul d op erat e so as to award Co un try m or e

in li qu id at ed da m ag es th an i t mi g h t reco ve r in act ua l da m ag es ; (2 ) do es no t red uc e

th e li qu id at ed da mag e s a w a rd to pr es en t va lu e; an d (3 ) cal cu la te s th e li qu id at ed

da m ag es du e ba se d on gr os s r e v e n u e s , no t pr of it s. The In te rs ta te Defen da nt s al so

arg ue th at th e li qu id at ed da m ag es pr ov is io n is an un reas on ab le res tra in t on th ei r rig ht

to ali en at e th e p ro pe rty and is , for th at reas on , in va li d.

Lik e th e di st ric t co ur t, we fin d th e In te rs ta te Defen da n t s ’ a r gu m en ts

un pe rs ua si ve

. The cas e ci ta ti on s th ey pr ov id e do no t su pp or t th ei r co nc lu si on th at th e

li qu id at ed da m ag es pr ov is i o n i s i n va li d as a m at te r of la w. And

, th e In te rs ta te

Defen da nt s ha ve no t de m on st rat ed th at th e cl au se op erat es as a pu re pe na lt y by vi rtu e

of be in g an un reas on ab le es ti m at e of th e act ua l da m ag es Co un try m ay ha ve su ffer ed

.

The li qu id at ed da m ag es th e In te rs ta te Defen da nt s ag reed to pa y Co un try in th e ev en t

of a br each si m

pl y are no t “ so gr os sl y di sp ro po rti on at e to an y d a mag e s t ha t m ig ht

reas on ab ly be ex pe ct ed to fo ll ow fro m a br each as to sh ow th at th e pa rti es co ul d ha ve

in te nd ed on ly to in du ce fu ll pe rfo rm an ce, rat he r th an to li qu id at e th ei r da m ag es .”

Lef emin e , 57 3 So

. 2d at 32 8. And

, th e li qu id at ed da m ag es cl au se do es no t op erat e as

an im pe rm is si bl e ba r on th e In te rs ta te Defen da nt s’ r ig ht to tra ns fer t he pro pe rty. It

si m pl y m ak es tra ns fer of th at pr op ert y t o a pu rch as er who do es no t co nt in ue to

op erat e th e h ot el as a Co un try fran ch is e m or e co st ly.

4The refo re, w e fin d no erro r in th e di st ric t cou rt’s gran t of sum m ary jud gm en t

to Co un try on Co un t II of t he co m pl ai nt an d a ffi rm

th e jud gm en t.

AFFIR MED.

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