Court Opinion

ID: 4025483
Source: CourtListenerOpinion
Date Created: 2016-08-16 18:05:20.699812+00
Date Added: 2024-06-11T12:59:18.013061
License: Public Domain

Case: 16-10581     Date Filed: 08/16/2016   Page: 1 of 8

                                                              [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                 No. 16-10581
                             Non-Argument Calendar
                           ________________________

                   D.C. Docket No. 8:14-cv-00895-VMC-MAP

GOTTLIEB & GOTTLIEB, P.A.,

                                                                  Plaintiff-Appellee,
                                      versus

DOCTOR R. CRANTS,

                                                               Defendant-Appellant.

                           ________________________

                   Appeal from the United States District Court
                       for the Middle District of Florida
                         ________________________

                                 (August 16, 2016)

Before WILSON, WILLIAM PRYOR and ROSENBAUM, Circuit Judges.

PER CURIAM:

      Doctor R. Crants appeals the summary judgment in favor of Gottlieb &

Gottlieb, P.A. After Gottlieb sued Crants in a Florida court to collect more than

$1.5 million that Crants owed on several promissory notes, Crants removed the
               Case: 16-10581     Date Filed: 08/16/2016    Page: 2 of 8

action to the district court based on diversity of citizenship, 28 U.S.C. §§ 1441(b),

1332(a). The district court ruled that no genuine factual dispute existed about the

enforceability of the promissory notes because Crants failed to identify in his

answer what specific condition precedent to payment was unfulfilled, see Fed. R.

Civ. P. 9(c), or, alternatively, to allege that an affirmative defense barred

enforcement of the notes, Fed. R. Civ. P. 8(c). After careful review, we affirm.

                                 I. BACKGROUND

      Crants executed 20 promissory notes made payable to Gottlieb. Crants

admitted that he had signed “the document[s] attached to [Gottlieb’s] Complaint”;

that they were true and genuine copies of the “promissory note[s], the terms of

which speak for themselves”; that he had received the value stated on the notes in

exchange for their delivery to Gottlieb; and that Gottlieb had demanded payment.

Each note stated that the “[p]ayment of principle and interest is to be made . . . to

[Gottlieb], or their order, ON DEMAND.”

      The parties disputed whether payment was overdue. Paragraph six of

Gottlieb’s complaint alleged that “[a]ll conditions precedent to the institution and

maintenance of this action have been performed or have occurred.” Crants’s

answer “denied the allegations contained in Paragraph 6 of the Complaint.” Crants

also alleged generally in his Third Defense that Gottlieb’s “claims are barred by

the nonperformance of a condition precedent.”

                                           2
              Case: 16-10581     Date Filed: 08/16/2016    Page: 3 of 8

      In his answers to interrogatories and his deposition, Crants asserted that

payment of the promissory notes was conditioned on an oral agreement that he had

with Jerry Gottlieb, one of the two shareholders of Gottlieb. Crants stated that he

was hired by LCS Corrections to improve its fiscal health and to sell the company,

which was owned in part by Gottlieb. Before Crants joined LCS, he and Jerry

Gottlieb agreed, “as consideration for [Crants’s] work,” that he would receive half

of “any net proceeds from the sale of LCS”; that LCS “would assist” and equally

share in the profits from Crants’s “two private prison projects”; and Jerry Gottlieb

“would lend . . . Crants $250,000 to support his team’s efforts to fix LCS . . . and

to develop” his private projects. A couple of days later, Crants “received a check

from Gottlieb . . . for $250,000, and [Crants] executed a Note payable in that

amount.” During the “next two years,” Gottlieb “continued to lend Mr. Crants

money—always on the condition that such loans would not be payable until the

sale of [LCS]” or the private projects and that “Crants would not have to pay the

demand notes . . . except out of the proceeds of the sale of one of those projects.”

      After expiration of the initial and extended periods for discovery, Crants

moved to compel Gottlieb to produce documents to prove there was an “oral

agreement precedent” that the “Notes would not become due and payable until

LCS was sold.” Gottlieb responded that, under Florida law, Crants’s “evidence and

defense violate[d] the parol evidence rule” because it “contradict[ed] the

                                          3
               Case: 16-10581     Date Filed: 08/16/2016    Page: 4 of 8

unambiguous terms of each of the promissory notes with respect to the date when

payment is due, i.e., on demand, and the manner in which the notes are payable,

i.e., in lawful money of the United States.” Crants moved for leave to reply, but a

magistrate judge denied the motion. In the motion, Crants asserted, for the first

time, the affirmative defense of conditional delivery.

      Gottlieb filed a motion for summary judgment, which the district court

granted. The district court ruled that Crants had failed to “specifically and

particularly plead his denial” of a condition precedent, Fed. R. Civ. P. 9(c), and his

“Third Defense [was] also too general to excuse his noncompliance with Rule

9(c).” In the alternative, the district court ruled that Crants had waived the

affirmative defense of conditional delivery by failing to plead it in his answer, see

Fed. R. Civ. P. 8(c), to raise the affirmative defense in an amended answer, or to

move for summary judgment based on the affirmative defense. Later, the district

court overruled Crants’s motion to alter or amend the judgment.

                          II. STANDARDS OF REVIEW

      We review de novo a summary judgment and view the evidence in the light

most favorable to the nonmoving party. Latimer v. Roaring Toyz, Inc., 601 F.3d

1224, 1232 (11th Cir. 2010). We review the determination that a party has waived

an affirmative defense for abuse of discretion. EEOC v. White & Son Enters., 881

F.2d 1006, 1009 (11th Cir. 1989).

                                           4
               Case: 16-10581     Date Filed: 08/16/2016   Page: 5 of 8

                                 III. DISCUSSION

      This appeal turns on whether Crants satisfied the pleading requirements in

Federal Rules of Civil Procedure 8 and 9. Those rules outline how litigants in civil

actions should identify their respective legal positions to ensure that the parties and

the district court can discern what issues must be adjudicated. To that end, Rules 8

and 9 contain specific instructions about alleging affirmative defenses and

conditions precedent. A defendant “responding to a pleading . . . must state

affirmatively . . . any avoidance or affirmative defense.” Fed. R. Civ. P. 8(c). When

“denying that a condition precedent has occurred or been performed, a party must

do so with particularity.” Fed. R. Civ. P. 9(c).

      The district court did not abuse its discretion when it determined that Crants

failed to comply with Rule 9(c). Crants’s denial that all conditions precedent had

occurred was, as the district court stated, “‘as general as a denial can be’ and

therefore insufficient” to satisfy the particularity requirement of Rule 9(c). See

Myers v. Cent. Fla. Invs., Inc., 592 F.3d 1201, 1224 (11th Cir. 2010); see also

Jackson v. Seaboard Coast Line R.R. Co., 678 F.2d 992, 1009 (11th Cir. 1982) (“If

the party does not deny the satisfaction of the conditions precedent specifically and

with particularity, . . . the allegations are assumed admitted and cannot later be

attacked.”). And his Third Defense failed to remedy the deficiency. Crants’s

allegation that Gottlieb’s “claims are barred by the nonperformance of a condition

                                           5
               Case: 16-10581    Date Filed: 08/16/2016    Page: 6 of 8

precedent” was, as the district court stated, equally “generic because it did not state

the particulars of the condition precedent or even which condition precedent was at

issue.” See Myers, 592 F.3d at 1224.

      The district court also did not abuse its discretion when it determined that

Crants failed to “state affirmatively” the defense of conditional delivery. See Fed.

R. Civ. P. 8(c). Florida has long recognized that conditional delivery is an

affirmative defense to the enforcement of a negotiable instrument, see Felkel v.

Abernethy, 150 So. 631, 632 (Fla. 1933); Ketchian v. Concannon, 435 So. 2d 394,

395 (Fla. Dist. Ct. App. 1983), that “must be raised in the pleadings,” Kehle v.

Modansky, 696 So. 2d 493, 494 (Fla. Dist. Ct. App. 1997). Crants was obliged to

“state in short and plain terms [his] defenses,” Fed. R. Civ. P. 8(b)(1)(A), but he

failed to mention the affirmative defense of conditional delivery in his answer or

during the initial or extended periods for discovery. The district court was entitled

to conclude that Crants waived the affirmative defense. See Am. Nat’l Bank of

Jacksonville v. FDIC, 710 F.2d 1528, 1537 (11th Cir. 1983); see also Latimer, 601

F.3d at 1239 (“Failure to plead an affirmative defense generally results in a waiver

of that defense.”).

      Crants argues that he did not waive the affirmative defense of conditional

delivery, but we cannot say that the contrary decision of the district court

constituted an abuse of discretion. Until Gottlieb moved for summary judgment,

                                           6
               Case: 16-10581     Date Filed: 08/16/2016    Page: 7 of 8

Crants portrayed his defense as an oral agreement that modified the demand notes.

Under Florida law, “[t]here is a vast difference between the condition precedent to

the requirement of payment . . . and a conditional delivery.” Cockrell v. Taylor,

165 So. 887, 892 (Fla. 1936). A conditional delivery exists when the promissory

note becomes effective only upon the occurrence of a condition or contingency, but

a condition precedent exists when there is a parol agreement between the parties

that the note is enforceable only “under certain conditions.” Anderson v. Ax, 139

So. 798, 799 (Fla. 1932); see Cockrell, 165 So. at 892–93; Ketchian, 435 So. 2d at

395. “In deciding waiver issues under Rule 8(c), . . . [we] examine[] whether a

plaintiff had notice of the unpled defense or was prejudiced by the lack of notice.”

Proctor v. Fluor Enters., Inc., 494 F.3d 1337, 1350 (11th Cir. 2007). The plaintiff

has notice of an affirmative defense when, for example, the defendant addresses

the specific unpled defense in pretrial filings, see Hassan v. U.S. Postal Serv., 842

F.2d 260, 263 (11th Cir. 1988), raises the defense in a motion for summary

judgment, see Proctor, 494 F.3d at 1352, or litigates the defense without objection,

see Jones v. Miles, 656 F.2d 103, 107 (5th Cir. 1981).

      The rulings by the district court reflect a sentiment that Crants’s filings

failed to provide Gottlieb fair notice of the “vastly differen[t]” defense of

conditional delivery. See Cockrell, 165 So. at 892. As the district court stated when

entering judgment for Gottlieb, Crants failed to “plead the affirmative defense of

                                           7
              Case: 16-10581     Date Filed: 08/16/2016    Page: 8 of 8

conditional delivery,” he “did not raise the defense of conditional delivery in a

motion for summary judgment, nor did he seek to amend his Answer,” and his

“response raise[d] no argument outside the context of the defense of

nonperformance of a condition precedent.” When denying Crants’s motion to alter

or amend the judgment, the district court refused to “excuse” him from the

pleading requirements “given [the] unspecified nature” of his “oral condition

precedent defense.” And Crants could not avoid waiver by asserting the affirmative

defense in his opposition to Gottlieb’s motion for summary judgment. See Gilmour

v. Gates, McDonald & Co., 382 F.3d 1312, 1315 (11th Cir. 2004) (concluding that

a party may not amend a pleading “through argument in a brief opposing summary

judgment”). The district court did not abuse its discretion when it determined that

Crants waived the affirmative defense of conditional delivery.

      The district court did not err by entering summary judgment in favor of

Gottlieb. Crants admitted that he signed, delivered, and received the benefit of the

promissory notes. Crants also admitted that “the terms of . . . [the notes] speak for

themselves,” and those notes state unambiguously that they are payable on

demand. Because Gottlieb demanded payment, it was entitled to collect the

principal and interest accrued, the amount of which Crants does not contest.

      We AFFIRM the summary judgment in favor of Gottlieb.

                                          8