Third District Court of Appeal

State of Florida 

Opinion filed May 8, 2024.

Not final until disposition of timely filed motion for rehearing.

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No. 3D23-0071

Lower Tribunal No. 21-2908

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CG Tides LLC, et al.,

Appellants,

vs.

SHEDDF3 VNB, LLC,

Appellee.

An appeal from the Circuit Court for Miami-Dade County, Pedro P. 

Echarte, Jr., Judge.

Young, Berman, Karpf & Karpf, P.A., and Andrew S. Berman; Richard 

and Richard, P.A., and Dennis Richard and Kevin R. Shohat, for appellants.

Lynx Law PLLC, and Christopher B. Spuches; Agentis PLLC, and 

Christopher B. Spuches and Tamara Van Heel; Law Offices of Paul Morris, 

P.A., and Paul Morris, for appellee.

Before LOGUE, C.J., and LINDSEY and LOBREE, JJ.

LOGUE, C.J.
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CG Tides LLC, et al. (the “Borrowers”) appeal a final summary 

judgment of foreclosure. Among other things, the judgment at issue allows 

over $20,000,000 in retroactively calculated default interest on a loan with a 

principal balance of $41,793,694. The retroactive default interest is based on 

the finding that the Borrowers’ use of hurricane insurance proceeds to repair 

hurricane damage to the mortgaged property violated the Note and therefore 

constituted a default. Because an issue of fact exists regarding whether the

lender agreed to the use of the proceeds for this purpose, we reverse.

BACKGROUND

This foreclosure case involves three main actors. The first is the

Appellants, CG Tides LLC, et al., which are the mortgagors that borrowed 

the money and granted the Mortgage at issue. The second is the original 

lender, Ocean Bank. The third is the Appellee, SHEDDF3 VNB, LLC (the 

“Note Holder”), which purchased the Note from Ocean Bank and brought the 

foreclosure action.

We are reviewing the grant of a motion for summary judgment. So, we 

begin with the undisputed facts. In October 2014, the Borrowers obtained a 

$45,000,000 loan from Ocean Bank and granted a mortgage in the Tides 

Hotel on Miami Beach. To simplify greatly, the Note provided for the payment 

of interest only during the term of the loan and the payment of the entire 
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principal on a set date, unless the parties exercised an option to convert the 

loan to a more traditional 25-year loan. The Borrowers were required to fund 

an escrow account at Ocean Bank to ensure payment of the interest. The 

parties extended the due date for payment of the principal several times.

In September 2017, the Hotel was seriously damaged by Hurricane 

Irma and was closed for over a year. The Mortgage authorized Ocean Bank 

to direct the Hotel's insurance company to pay any insurance proceeds 

directly to Ocean Bank and provided that Ocean Bank could sign any draft 

as the Borrowers’ attorney. However, under the Note and Mortgage, Ocean 

Bank had the “sole but reasonable discretion not to use the proceeds to 

repair,” except in certain, limited circumstances when the proceeds had to 

be used to repair the Hotel. The Borrowers, on the other hand, were obliged 

to repair the Hotel even if the proceeds were not available for that purpose.

Within a few weeks of the hurricane, representatives from the 

Borrowers and Ocean Bank met at the Hotel, inspected the hurricane 

damage, and discussed the Borrowers’ insurance claim. Despite the 

Mortgage’s terms, and although aware of the insurance claim, Ocean Bank 

never exercised the option to have the insurance proceeds sent directly to it.

In November 2017, the Borrowers received $2,000,000 in insurance 
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proceeds. The Borrowers spent at least $7,728,367 to repair and renovate 

the Hotel after the hurricane.

At this point, the parties’ summary judgment materials presented two 

alternative views of the facts. The Note Holder contended that there was no 

record evidence that the funds spent by the Borrowers to repair the Hotel

after the hurricane included the insurance proceeds. It also denied that 

Ocean Bank knew of or approved the Borrowers’ use of the insurance 

proceeds to repair the Hotel, contending Ocean Bank did not learn of this

until after it sold the Note to the Note Holder. Among other things, the Note 

Holder relied on the affidavit of an Ocean Bank vice president so testifying

and on Ocean Bank emails inquiring about the insurance proceeds. In 

argument, the Note Holder maintained the Borrowers’ use of the insurance 

proceeds was done “secretly” and rose to the level of “felony grand theft.”

On the other hand, the Borrowers maintained the opposite. In an 

affidavit of one of their principals, they asserted that the $7,728,367 they 

spent after the hurricane included the hurricane proceeds and that Ocean 

Bank’s loan officer verbally agreed to use the insurance proceeds to repair 

and renovate the Hotel. The Borrowers also presented documents showing 

that they sent Ocean Bank a tax return that included a reference to receipt 

of the insurance proceeds. Finally, they pointed to Ocean Bank’s loan file 
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which contained a February 22, 2018 entry stating “the Tides Hotel property 

was damaged in the hurricane and has been closed since[,] . . . the 

Borrower[s] expect[ ] to use the insurance proceeds to perform the 

renovations and expansion of the Tides Hotel.” Ocean Bank stamped this 

entry “approved.” A related memorandum in the file regarding construction 

at the Hotel also stated the Borrowers intended to use the insurance 

proceeds “to perform renovations” in light of “damage during Hurricane 

Irma.”

Subsequently, around March 2020, shortly after the due date expired, 

the Borrowers and Ocean Bank agreed to modifications of parts of the Note 

and related agreements. According to the Borrowers’ materials, 

modifications were agreed such that (1) the final due date was extended to 

December 20, 2020; (2) the Borrower pre-paid all interest on the loan through 

the due date; and (3) Ocean Bank waived default interest1 and indicated that 

it was unaware of any other defaults.

In October 2020, as the due date approached, the parties made further 

modifications that allowed Ocean Bank to use certain of the Borrowers’ funds 

escrowed with Ocean Bank to pay down the principal to $41,793,694. Among 

other things, this modification recognized that the parties anticipated that the 

1 Exactly what default interest was waived is disputed.
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“Borrower[s] will make arrangements to refinance the [l]oan with another 

Lender . . . .”

The due date of December 20, 2020 came but the Borrowers failed to 

pay the principal (the interest had already been paid to that date). The 

Borrowers then arranged to refinance the now-defaulted loan. They signed 

a detailed term sheet and deposited $100,000 with a new lender for a loan 

of $52,000,000 to close in the second week of February 2021, subject to 

receiving a payoff letter from Ocean Bank.

Shortly afterwards, on January 26, 2021, Ocean Bank sold the loan to 

the Note Holder. The Note was sold at par for the principal owed, 

$41,793,694. According to the managing director of the Note Holder, its 

business model is to acquire pre-existing, non-performing loans so that it can

“mine the loan histories” to “exploit” opportunities to obtain “retroactive 

default interest.”

When asked to provide the payoff letter for the new financing, the Note 

Holder wrote that “it ha[d] just come to [it]’s attention” that the Borrowers had 

obtained insurance proceeds and failed to deliver the proceeds to the Note 

Holder’s predecessor, Ocean Bank, as required by the Note and Mortgage. 

That being so, the Note Holder demanded interest at the default interest rate 

of 18%, not as of the defaulted payoff date of December 20, 2020, but 
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retroactively to September 30, 2017 (the date the Borrowers allegedly failed

to turn over the insurance proceeds). It did this even though the interest for 

the period had already been paid, albeit at the non-default rate. Based on 

this demand, although the principal owed was $41,793,694, the payoff letter 

demanded $26,442,454 in retroactive default interest from September 9, 

2017 to February 2, 2021, resulting in a new amount owed of $61,058,454. 

The Note Holder’s payoff letter thereby effectively ended the planned 

$52,000,000 refinancing.

Ultimately, the Note Holder filed the underlying foreclose action. The 

Borrowers counterclaimed for breach of contract and various other remedies. 

The Note Holder moved for summary judgment. The trial court granted the 

Note Holder’s motion for summary judgment. It entered a total foreclosure 

judgment of $82,169,522, which included principal of $41,793,694, 

miscellaneous costs, and pre-judgment default interest of $40,167,725. This 

appeal followed.

DISCUSSION

The Borrowers raise several arguments in this appeal. We address 

one. The Borrowers argue that summary judgment was precluded by an 

issue of fact—whether the Borrowers’ use of the insurance proceeds to 
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repair the hurricane damage breached the loan contract and triggered a 

default.

Properly understood, summary judgment is akin to a pre-trial directed 

verdict. In re Amends. to Fla. R. of Civ. Proc. 1.510, 317 So. 3d 72, 75 (Fla. 

2021) (recognizing “the fundamental similarity between the summary 

judgment standard and the directed verdict standard”). Summary judgment 

is not designed to resolve disputed issues of fact. It merely serves to identify 

whether an issue of fact exists that must be resolved by trial. Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (“The inquiry performed is the 

threshold inquiry of determining whether there is the need for a trial—

whether, in other words, there are any genuine factual issues that properly 

can be resolved only by a finder of fact because they may reasonably be 

resolved in favor of either party.”).

The evidence in the summary judgment record is interpreted in the light 

most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. 

Zenith Radio Corp., 475 U.S. 574, 587 (1986) (“[O]n summary judgment the 

inferences to be drawn from the underlying facts . . . must be viewed in the 

light most favorable to the party opposing the motion.” (citations and

quotation marks omitted)). “Credibility determinations, the weighing of the 

evidence, and the drawing of legitimate inferences from the facts are jury 
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functions, not those of a judge, whether he is ruling on a motion for summary 

judgment or for a directed verdict.” Anderson, 477 U.S. at 255.

Summary judgment “by no means authorizes trial on affidavits.” Id.

Once a court determines the summary judgment record contains conflicting 

evidence on a material issue of fact from which a factfinder could reach 

different conclusions by crediting some evidence over other evidence, the 

court does not resolve the factual dispute. Id. It simply denies summary 

judgment and allows the case to proceed to trial. Id.

With this law in mind, we turn to a review of the summary judgment 

record in this case on the issue of whether Ocean Bank knew and approved 

of the Borrowers’ use of the insurance proceeds to repair the hurricane 

damage to the Hotel. On one hand, a vice president of Ocean Bank denied 

this fact under oath. On the other hand, when interpreted in a light most 

favorable to the non-moving party, other evidence in the summary judgment 

indicates that Ocean Bank knew of the hurricane damage, knew of the 

insurance claim, did not exercise its right under the Mortgage to direct the 

insurance company to pay the proceeds solely to itself, received a copy of 

the Borrowers’ tax return reflecting receipt of the insurance proceeds at 

issue, verbally approved the use of the proceeds for repair and renovation, 

and approved this use in writing in its own internal records.
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Moreover, under the Note and Mortgage, any denial by Ocean Bank of 

the use of the proceeds for repair had to be reasonable. The Hotel was 

Ocean Bank’s collateral for the loan; the loan was for over twenty times the 

value of the insurance proceeds; and the repairs allowed the Hotel to reopen.

The parties also continued to cooperate and make modifications to the loan 

that were beneficial to both parties.

The point is not that any of these “facts” have been finally established 

as “true.” The point is that the evidence and inferences therefrom conflict. A 

factfinder could reach different results depending on what evidence it 

credited and what reasonable inferences it draws from the evidence credited. 

Given the state of the record, summary judgment should not have been 

entered on this issue. Accordingly, we reverse the entry of summary 

judgment in its entirety and remand for further proceedings consistent with 

this opinion.

Reversed and remanded.