Court Opinion

ID: 9881872
Source: CourtListenerOpinion
Date Created: 2023-10-04 15:19:17.188956+00
Date Added: 2024-06-11T14:25:20.169403
License: Public Domain

Third District Court of Appeal
                               State of Florida

                        Opinion filed October 4, 2023.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                             No. 3D21-1547
                       Lower Tribunal No. 18-37446
                          ________________

                         Stephen Hess, et al.,
                                 Appellants,

                                     vs.

                     PMG-S2 Sunny Isles, LLC,
                                  Appellee.

    An Appeal from the Circuit Court for Miami-Dade County, William
Thomas, Judge.

     Quintana Portal Villalon, PLLC, J. Luis Quintana and Kirk Villalón;
Schlesinger Law Group, and Michael J. Schlesinger, for appellants.

      Kluger, Kaplan, Silverman, Katzen & Levine, P.L., Josh M. Rubens and
Philippe Lieberman; Samson Appellate Law, and Daniel M. Samson, for
appellee.

Before EMAS, HENDON and LOBREE, JJ.

     EMAS, J.
      INTRODUCTION

      Appellants, Stephen Hess and Clearwater Beach Company, LLC,

plaintiffs below, appeal a final judgment awarding contractual prevailing party

attorney’s fees and costs to PMG-S2 Sunny Isles, LLC (PMG), the defendant

below.

      Hess and Clearwater contend the trial court erred in awarding

attorneys’ fees and costs against them, asserting such an award is

inconsistent with the trial court’s finding that Hess and Clearwater lacked

standing to assert their claims of rescission and breach of contract against

PMG because Hess and Clearwater had assigned the underlying contracts

to other entities. In other words, Hess and Clearwater argue that the fee

award cannot stand where it is based on the same contract the trial court

already found Hess and Clearwater lacked standing to sue under. In the

same vein, Hess and Clearwater contend the trial court should have found

that PMG was judicially estopped from obtaining an award of attorneys’ fees

and costs against them where PMG successfully argued Hess and

Clearwater lacked standing to assert their claims for rescission and breach

of contract. We affirm, holding that the trial court correctly determined, under

the express terms of the agreements at issue, that Hess and Clearwater

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remained liable to PMG for its attorneys’ fees and costs, and properly

awarded those amounts against Hess and Clearwater, jointly and severally.

     FACTUAL AND PROCEDURAL BACKGROUND

     This case arises out of real estate transactions involving pre-

construction condominium units. The relevant facts are set out in our prior

opinion, Hess v. PMG-S2 Sunny Isles, LLC, 349 So. 3d 547 (Fla. 3d DCA

2022) (Hess I):

     In 2014, Stephen Hess visited Muse, a condominium located in
     Miami-Dade being developed by PMG, where he reviewed
     promotional materials and floor plans for prospective units. Hess,
     and his company Clearwater, subsequently entered into
     purchase agreements with PMG for the purchase and sale of
     three pre-construction condominium units at Muse [The
     Purchase Agreements]. Hess paid PMG $6.1 million in deposits
     for the units.

     ...

     In May 2018, Hess and Clearwater assigned their “rights, title,
     interests and obligations” under the agreements [The
     Assignment Agreement] to Muse 1901, Muse 2101 and Muse
     2201 (the “Muse entities”). Notice of the assignments were sent
     to PMG. Closing was scheduled for May 31, 2018, but the Muse
     entities failed to timely close. In late June, PMG furnished the
     Muse entities with formal written notice of default and terminated
     the agreements.

     In November 2018, Hess and Clearwater filed a complaint
     against PMG for recission pursuant to sections 718.202 and
     718.506, Florida Statutes, breach of contract and declaratory
     judgment challenging the enforceability of the default damages

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      clause in the agreements.[1] Following a motion by PMG, the trial
      court dismissed the declaratory judgment action without
      prejudice as the issue was not ripe because the units had not
      been resold. Hess and Clearwater then filed an amended
      complaint, including the Muse entities as co-plaintiffs and
      reasserting the claims for recission and breach of contract only.
      After initial discovery was conducted, both Hess and PMG filed
      motions for summary judgment.

      In March 2020, rather than proceeding to trial, the trial court
      heard argument in support of the cross-motions and granted
      PMG's motion for summary judgment finding Hess and
      Clearwater lacked standing and the remaining claims were
      unsupported. Hess and the Muse entities subsequently filed a
      motion for reconsideration of the entry of summary judgment and
      requested to amend their complaint to reassert their previous
      claim regarding the calculation of the deposits because they
      learned the issue had recently ripened as PMG resold at least
      one of the units. The trial court subsequently denied the motion
      for rehearing and motion to amend, entering final judgment in
      PMG's favor.

Id. at 548-49 (emphasis added).

      Importantly, the Assignment Agreement between Hess/Clearwater and

the Muse entities specifically provided:

      Notwithstanding the Assignment by the Assignor [Hess and
      Clearwater] to Assignee [the Muse entities], the Assignor shall
      remain liable to Seller [PMG] under the terms and conditions
      of the Purchase Agreement until the closing of the
      transaction under the Purchase Agreement.

1
 Hess and Clearwater sought the return of $6.1 million in deposits it paid to
PMG.

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(Emphasis added). It is undisputed that the Muse entities failed to close the

transaction under the Purchase Agreements.

      In entering summary judgment in favor of PMG on Hess and

Clearwater’s claims for rescission and breach of contract, the trial court

determined that, because Hess and Clearwater assigned the Purchase

Agreements to the Muse entities, Hess and Clearwater lacked standing to

assert a claim for breach of contract or for rescission under sections 718.202

and 718.506, Florida Statutes (2018). The Assignment Agreement between

Hess/Clearwater      and    the   Muse       entities   expressly   provided   that

Hess/Clearwater, as assignor, “does hereby assign, transfer and set over

onto the Assignee [the Muse entities] . . . all of Assignor’s right, title, interest

and obligations under that certain Purchase Agreement. . . .” The trial court

found, pursuant to this plain language, that the assignment of the Purchase

Agreements barred Hess’ and Clearwater’s claims.

      In Hess I, we affirmed the trial court's entry of summary judgment in

favor of PMG on Hess’ claims for breach of contract and rescission.

      Following remand from Hess I, the trial court proceeded to a

determination of the remaining issue of entitlement and amount of attorney’s

fees and costs to be awarded against Hess and in favor of PMG as the

prevailing party under the terms of the Purchase Contract. PMG filed its

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motion, and Hess filed a response in opposition, arguing that Hess’

assignment of the Purchase Agreements to the Muse entities precluded an

award of attorney’s fees and costs against Hess. The trial court granted

entitlement to attorney’s fees and costs in favor of PMG and against Hess

and Clearwater, ruling Hess and Clearwater are jointly and severally liable

for trial and appellate attorney’s fees and costs.

      After conducting additional discovery, the parties stipulated that the

number of hours expended, and rates charged, by PMG’s counsel were

reasonable. Following a hearing, the trial court entered judgment in favor of

PMG and against Hess, Clearwater, and the Muse entities, jointly and

severally, for trial court fees, appellate court fees, costs and post-judgment

interest in the total sum of $507,500.00. Hess and Clearwater appeal this

final judgment.

      STANDARD OF REVIEW

      In Fallstaff Group, Inc. v. MPA Brickell Key, LLC, 143 So. 3d 1139,

1142-43 (Fla. 3d DCA 2014), this court explained the proper standard of

review:

      [A]lthough we generally review a court's ruling on entitlement to
      attorney's fees for an abuse of discretion, Ocean Club Cmty.
      Ass'n v. Curtis, 935 So. 2d 513 (Fla. 3d DCA 2006), where that
      ruling relies upon the interpretation of contractual provisions, our
      standard of review is de novo. Kapila v. AT & T Wireless Servs.,
      Inc., 973 So. 2d 600 (Fla. 3d DCA 2008).

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     ANALYSIS AND DISCUSSION

     Hess and Clearwater contend that the trial court erred in awarding

attorneys’ fees and costs where the trial court had previously determined

Hess and Clearwater lacked standing to sue under the Purchase

Agreements because of the assignment of those agreements to the Muse

entities. We find no merit in this argument.

     The trial court’s award of attorney’s fees and costs against Hess and

Clearwater (as well as the Muse entities) was proper, notwithstanding its

earlier determination that Hess and Clearwater lacked standing to assert

contractual claims of rescission and breach of contract. The reason for this

can be found in the express terms of the Assignment Agreement between

Hess/Clearwater and the Muse entities, which provided:

     Notwithstanding the Assignment by the Assignor [Hess and
     Clearwater] to Assignee [the Muse entities], the Assignor shall
     remain liable to Seller [PMG] under the terms and conditions of
     the Purchase Agreement until the closing of the transaction
     under the Purchase Agreement.

(Emphasis added).

     It is undisputed that “the closing of the transaction under the Purchase

Agreement” never occurred. And because the closing never occurred, the

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Assignor (Hess and Clearwater) “remain[ed] liable to Seller [PMG] under the

terms and conditions of the Purchase Agreement.”

      The terms and conditions of each Purchase Agreement, in turn,

provide that the prevailing party is entitled to an award of attorney’s fees and

costs:

      In the event of any litigation between the parties under this
      Agreement, the prevailing party shall be entitled to reasonable
      attorneys’, paralegals and para-professionals fees and court
      costs at all trial and appellate levels.

This express term of the Purchase Agreement—to which Hess and

Clearwater remained bound “[n]otwithstanding the Assignment of the

Purchase Agreement” to the Muse entities—meant that if the transaction

failed to close, and if PMG prevailed in the litigation under the Purchase

Agreement, Hess and Clearwater “shall remain liable” for payment of PMG’s

attorney’s fees and costs.

      In light of the Assignment’s plain language, the case law relied upon

by Hess and Clearwater, see, e.g., Bank of New York Mellon Tr. Co., N.A.

v. Fitzgerald, 215 So. 3d 116, 119 (Fla. 3d DCA 2017) (“Section 57.105(7),

however, cannot transform a contract's unilateral fee provision into a

reciprocal obligation where, as here, no contract exists between the

parties.”); U.S. Bank, N.A. v. Raheb, 259 So. 3d 912, 917 (Fla. 3d DCA 2018)

(“Raheb did not prove at the hearing and there was no finding by the trial

                                       8
court that both Raheb and the Trust were parties to the note and mortgage.

Thus, Raheb is not entitled to fees here.”) is simply inapplicable. 2 We find

no merit in the remaining arguments raised by Hess and Clearwater.

      CONCLUSION

      Pursuant to the Assignment Agreement, Hess and Clearwater

“remain[ed] liable to [PMG] under the terms and conditions of the Purchase

Agreement until the closing of the transaction under the Purchase

Agreement.” Because the transaction Purchase Agreement failed to close,

and because the Purchase Agreement provided for attorneys’ fees and costs

to the prevailing party, the trial court correctly determined that Hess and

Clearwater were liable to PMG for attorneys’ fees and costs, and properly

awarded those amounts to PMG as the prevailing party in the underlying

action.

Affirmed.

2
  In addition, we already rejected this argument in Hess I, when we issued
our order granting PMG’s motion for appellate attorneys’ fees on the
summary judgment issue. See Salta Inv., Inc. v. Silva, 584 So. 2d 172, 172
(Fla. 3d DCA 1991) (applying law of the case to order on fees: “[B]oth parties'
motions for attorney's fees made to this court were denied. This denial of
fees is conclusive as to that issue and controls as to the fees awarded in the
instant case.”); Langer v. Fels, 93 So. 3d 1069, 1071-72 (Fla. 4th DCA 2012)
(“Like Salta II, appellate attorney's fees in this case were denied during the
original appeal on the merits under the same statutory provisions that the
trial court determined would entitle Fels to a fee award at the trial level. As
such, we reverse the Fee Orders under consideration in this appeal.”)

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