Court Opinion

ID: 9902701
Source: CourtListenerOpinion
Date Created: 2023-11-27 15:21:58.964217+00
Date Added: 2024-06-11T09:21:57.536690
License: Public Domain

FIFTH DISTRICT COURT OF APPEAL
                STATE OF FLORIDA
                  _____________________________

                       Case No. 5D22-1296
                   LT Case No. 2021-CA-018796
                  _____________________________

THE CAPE, LLC and RIVERVIEW
ALF OPERATOR,

    Appellants,

    v.

OCH-ZIFF REAL ESTATE ACQUISITIONS
LP N/K/A SCULPTOR CAPITAL
INVESTMENTS, LLC and RIVERVIEW
BUYER, LLC,

    Appellees.
                  _____________________________

On appeal from the Circuit Court for Brevard County.
George T. Paulk, Judge.

Tucker H. Byrd, Scottie N. McPherson, and Andrew Domingoes,
of Byrd Campbell, P.A., Winter Park, for Appellants.

Kimberly S. Mello, I. William Spivey, II, Colin S. Baker, and
Arda Goker, of Greenberg Traurig, P.A., Orlando, for Appellees.

                       September 15, 2023

KILBANE, J.,

     The Cape, LLC and Riverview ALF Operator, LLC,
(collectively “Appellants”), appeal an order granting a motion to
dismiss on all counts of their five-count complaint in favor of
 Och-Ziff Real Estate Acquisitions LP n/k/a Sculptor Real Estate
Acquisitions, LP, and Riverview Buyer, LLC (collectively
“Appellees”). Because the trial court abused its discretion when
it dismissed the entire complaint with prejudice without
affording Appellants an opportunity to amend, we reverse.1

                             Facts
     In 2014, Appellants began the development of a 120-unit
assisted living and memory care facility in Palm Bay, Florida
(“the Project”).  To meet their financing needs, Appellants
borrowed $24,910,000.00 in First Mortgage Revenue Bonds
Series 2014A (“the A Bonds”) in addition to other bonds borrowed
through a tax-exempt municipal bond program that the City of
Palm Bay sponsored. Among other documents related to the
bonds, Appellants were bound by the terms of a Trust Indenture

    1    Because Appellants did not request relief pursuant to
Florida Rule of Civil Procedure 1.190(a) or our precedent in
Unrue v. Wells Fargo Bank, N.A., 161 So. 3d 536 (Fla. 5th DCA
2014), they waived the right to seek reversal based on leave to
amend once as a matter of course. See Coolen v. State, 696 So. 2d
738, 742 n.2 (Fla. 1997) (explaining that the “failure to fully brief
and argue” specific points on appeal “constitutes a waiver of these
claims”); Keech v. Yousef, 815 So. 2d 718, 719 (Fla. 5th DCA 2002)
(“A legal argument must be raised initially in the trial court by
the presentation of a specific motion or objection at an
appropriate stage of the proceedings.”). However, Appellants did
request leave to amend in their written response to the motion to
dismiss, and the trial court’s order explained repeatedly that
amendment would be futile. See Owens v. Corrigan, 252 So. 3d
747, 749 n.3 (Fla. 4th DCA 2018) (finding the issue preserved
where “it was presented to the trial court in the plaintiff's written
response in opposition to the motion to dismiss” although not
discussed at the hearing (citing Tillman v. State, 471 So. 2d 32,
35 (Fla. 1985))); see also Sparks v. Allstate Constr., Inc., 16 So. 3d
161, 164 (Fla. 3d DCA 2009) (explaining that an additional
objection “would have been an obviously futile gesture” (quoting
Webb v. Priest, 413 So. 2d 43, 46 (Fla. 3d DCA 1982))).
Accordingly, the grounds briefed provide an independent and
sufficient ground for reversal, and this opinion follows.

                                  2
and Security Agreement (“Trust Indenture”) and a Loan
Agreement.

     In 2018, Appellants sought a buyer for the A Bonds who
would restructure them on more favorable terms. In accordance
with an expressed mutual interest, in June 2018, Appellees sent
Appellants a “Summary of Terms” document. Based on the
proposed terms of the document, Appellees would purchase the A
Bonds and reissue them so that Appellants could continue to
operate the Project. In addition, Appellees would not enforce
certain provisions of the Trust Indenture and Loan Agreement
that would trigger a default. In return, Appellants would take
out a corporate loan and pay the current bondholder
representative $1,000,000.00 to subsidize Appellees’ purchase of
the A Bonds. By its own terms, however, the Summary of Terms
was non-binding with regard to any of its substantive provisions
discussing the potential purchase and modification of the A
Bonds unless and until a definitive agreement could be reached
subject to certain conditions and due diligence.

     Appellants contended that the deal was affirmed in
numerous emails and telephone calls, and in July 2018, they fully
performed their end of the deal. They alleged that they took out
the corporate loan as contemplated in the Summary of Terms to
subsidize Appellees’ purchase of the A Bonds and paid the
million-dollar premium to the then-bondholder representative, a
third-party. Appellees subsequently purchased the A Bonds from
the third-party and became the bondholder representative.
However, instead of reissuing and modifying the A Bonds,
Appellees declared a default citing the fact that no definitive
agreement was in place.

     In March 2021, Appellants filed a five-count complaint
against Appellees. Count I alleged a breach of contract; Count II
alleged a breach of contract implied-in-fact; Count III alleged
fraud in the inducement; Count IV alleged breach of contract
based on the Trust Indenture and Loan Agreement; and Count V
alleged unjust enrichment. In April 2021, Appellees filed a
dispositive motion to dismiss. Appellants filed a response in
opposition and requested leave to amend.

                               3
     Because the Summary of Terms included a choice-of-law
provision purporting to make New York law controlling, the trial
court analyzed the breach of contract claims in light of both
Florida and New York law. The court found that the Summary of
Terms was an unenforceable agreement to agree. Additionally,
the court found that no amendment to the breach of contract
claims would make the alleged contract satisfy the statute of
frauds. The court further concluded that the fraud in the
inducement claim failed as a matter of law because it was
derivative of a failed breach of contract claim. Finally, the court
found that Appellants’ unjust enrichment claim would never be
able to satisfy the direct benefit requirement.

    In sum, the trial court granted Appellees’ motion and
dismissed the entire complaint with prejudice without affording
Appellants an opportunity to amend. This appeal followed.

                             Analysis
       The sufficiency of a complaint is a matter of law reviewed
de novo. Conner, I, Inc. v. Walt Disney Co., 827 So. 2d 318, 319
(Fla. 5th DCA 2002) (citing Fox v. Pro. Wrecker Operators of Fla.,
Inc., 801 So. 2d 175, 178 (Fla. 5th DCA 2001)). “In ruling on a
motion to dismiss for failure to state a cause of action, the trial
court must accept the allegations of the complaint as true and in
a light most favorable to the plaintiff.” Id.

       “As a general rule, Florida allows liberal pleading
amendments unless it clearly appears that allowing the
amendment would prejudice the opposing party, the privilege to
amend has been abused, or the amendment would be futile.”
ABC Liquors, Inc. v. Centimark Corp., 967 So. 2d 1053, 1057 (Fla.
5th DCA 2007). “Where a party may be able to allege additional
facts to support its cause of action or to support another cause of
action based on a different legal theory, dismissal with prejudice
is an abuse of discretion.” Dennehy v. Srinagesh, 345 So. 3d 962,
964 (Fla. 5th DCA 2022) (quoting Kapley v. Borchers, 714 So. 2d
1217, 1218 (Fla. 2d DCA 1998)).

                                4
                          A. Statute of Frauds
     The trial court correctly concluded that the Summary of
Terms, without more, was an unenforceable agreement to agree.2
However, the court found that amending the pleadings would be
futile because no amendment would make the alleged contract
satisfy the statute of frauds. We disagree.

     Under Florida’s Banking Statute of Frauds, “[a] debtor may
not maintain an action on a credit agreement unless the
agreement is in writing, expresses consideration, sets forth the
relevant terms and conditions, and is signed by the creditor and
the debtor.” § 687.0304(2), Fla. Stat. (2021). This includes an
“agreement by a creditor to take certain actions, such as entering

      2   As a threshold matter, we note that “applying the
choice-of-law clause to resolve the contract formation issue would
presume the applicability of a provision before its adoption by the
parties has been established.” See Fridman v. 1-800 Contacts,
Inc., 554 F. Supp. 3d 1252, 1259 (S.D. Fla. 2021); see also Golden
Palm Hosp., Inc. v. Stearns Bank Nat’l Ass’n, 874 So. 2d 1231,
1235 (Fla. 5th DCA 2004) (“[I]t is generally appropriate for a
court in Florida, as a procedural issue, to determine the validity
and enforceability of a forum selection clause despite a choice of
law provision in the agreement.”). However, we do not address
the choice-of-law issue at this stage in the proceedings because
we agree with the trial court that under either Florida or New
York law the Summary of Terms is not an enforceable agreement.

      With no enforceable written agreement in place, we apply
Florida law to Appellants’ breach of contract claims. See Shaps v.
Provident Life & Acc. Ins. Co., 826 So. 2d 250, 254 (Fla. 2002)
(“Under Florida’s conflicts of law rules, the doctrine of lex loci
contractus directs that, in the absence of a contractual provision
specifying governing law, a contract, other than one for
performance of services, is governed by law of the state in which
the contract is made.”); Prime Ins. Syndicate, Inc. v. B.J. Handley
Trucking, Inc., 363 F.3d 1089, 1092–93 (11th Cir. 2004) (“The
determination of where a contract was executed is fact-intensive,
and requires a determination of ‘where the last act necessary to
complete the contract [wa]s done.’” (alteration in original)
(quoting Pastor v. Union Cent. Life Ins. Co., 184 F. Supp. 2d 1301,
1305 (S.D. Fla. 2002))).
                                5
into a new credit agreement, forbearing from exercising remedies
under prior credit agreements, or extending installments due
under prior credit agreements.” § 687.0304(3)3., Fla. Stat.
(2021). “A ‘loan modification agreement . . . is both an agreement
which extends credit and which makes a financial
accommodation,’ thus implicating the Banking Statute of
Frauds.” Wells Fargo Bank, N.A. v. Richards, 226 So. 3d 920, 922
(Fla. 4th DCA 2017) (alteration in original) (quoting Vargas v.
Deutsche Bank Nat’l Tr. Co., 104 So. 3d 1156, 1168 (Fla. 3d DCA
2012)).

     However, full performance by one party with acceptance by
the other party is sufficient to enforce an agreement that would
normally be subject to the statute of frauds. See J Square Enters.
v. Regner, 734 So. 2d 565, 566 (Fla. 5th DCA 1999) (agreeing that
“[t]here is no logical reason . . . why the full performance doctrine
should not also apply to the Bank Statute of Frauds”). Moreover,
“[f]or purposes of the statute of frauds, several writings . . . may
be aggregated to satisfy the statute.” Kolski ex rel. Kolski v.
Kolski, 731 So. 2d 169, 171–72 (Fla. 3d DCA 1999) (first
alteration in original) (quoting Cook v. Theme Park Ventures,
Inc., 633 So. 2d 468, 471 (Fla. 5th DCA 1994)). Consequently, the
statute of frauds did not conclusively bar Appellants’ breach of
contract claims. See Conner, I, 827 So. 2d at 319 (“Generally, the
statute of frauds is an affirmative defense that cannot be raised
in a motion to dismiss unless the complaint affirmatively shows
the conclusive applicability of such defense to bar the action.”).3
Therefore, the trial court’s dismissal of Counts I, II and IV
without affording Appellants the opportunity to amend was error.

    3   Even if we were to apply New York law, we would reach
the same result. Under New York law, it is well settled that
partial performance of an oral agreement may be deemed
sufficient to remove an agreement from the statute of frauds if
that performance is “unequivocally referable” to the alleged oral
agreement. Bordeau v. Oakley, 585 N.Y.S.2d 623, 625 (1992); see
also Eujoy Realty Corp. v. Van Wagner Commc’n, LLC, 22 N.Y. 3d
413, 425–26 (N.Y. 2013) (explaining that where there is only
partial performance, “ ‘the partial performance [must be]
unequivocally referable’ to the alleged oral modification” and that
“[t]his analysis has also been applied to the statute of frauds and
its codification at General Obligations Law § 5–703”).

                                 6
                     B. Fraud in the Inducement
     The trial court dismissed Appellants’ fraud in the
inducement claim as being merely derivative of a failed claim for
breach of contract. However, as the breach of contract claims in
this case are not failed, the fraud in the inducement claim is not
merely derivative.

     Additionally, Florida courts have recognized that a fraud in
the inducement claim may be brought where the party makes an
oral promise—contingent on certain circumstances—and the
promisor has no intention to act on that promise. See W.R.
Townsend Contracting, Inc. v. Jensen Civil Constr., Inc., 728 So.
2d 297, 304–05 (Fla. 1st DCA 1999) (holding that the trial court
wrongfully dismissed a claim for fraud in the inducement where
it was based on the alleged intention of the defendant not to
perform its contractual obligations). As we have explained:

    If a fraud is perpetrated which induces someone to enter
    into a contract, there is a cause of action for fraud and
    the remedies attendant to that particular tort are
    available. If there is no fraud inducing someone to enter
    into a contract, but the contract is breached, the cause of
    action sounds in contract and contract remedies are
    available.

La Pesca Grande Charters, Inc. v. Moran, 704 So. 2d 710, 712
(Fla. 5th DCA 1998). Because Appellants may be able to support
their fraud in the inducement claim, dismissal of Count III
without granting an opportunity to amend was error.

                        C. Unjust Enrichment
     If there is no express or implied-in-fact contract, a party may
recover under quasi-contract or unjust enrichment. Baron v.
Osman, 39 So. 3d 449, 451 (Fla. 5th DCA 2010) (citing Am. Safety
Ins. Serv., Inc. v. Griggs, 959 So. 2d 322, 331 (Fla. 5th DCA
2007)). Unjust enrichment “is an obligation created by the law to
remedy the unjust retention of a benefit conferred by another.”
Id. The elements of unjust enrichment are: “1) the plaintiff
conferred a benefit on the defendant, who has knowledge of the
benefit, 2) the defendant accepts and retains the conferred
benefit, and 3) under the circumstances it would be inequitable
for the defendant to retain the benefit without paying for it.”

                                 7
Duncan v. Kasim, Inc., 810 So. 2d 968, 971 (Fla. 5th DCA 2002).
The benefit conferred must be a direct benefit. Griggs, 959 So. 2d
at 331.

     Appellants’ complaint alleged that they took out a loan and
paid $1,000,000.00—as contemplated in the Summary of Terms—
to the then-bondholder representative for the sole purpose of
subsidizing Appellees’ purchase of the A Bonds. The third-party
bondholder representative subsequently sold the A Bonds to
Appellees.     However, the trial court found that these
circumstances did not satisfy the direct benefit requirement, and
as a result, Appellants’ unjust enrichment claim failed. The court
relied on Virgilio v. Ryland Group, 680 F.3d 1329, 1337 (11th Cir.
2012), to support its conclusion. We find that the trial court’s
reliance on Virgilio is misplaced.

     In Virgilio, the Eleventh Circuit distinguished MacMorris v.
Wyeth, Inc., wherein one party conferred a benefit on another
party through an intermediary.          680 F.3d at 1337 (citing
MacMorris v. Wyeth, Inc., No. 2:04–cv–596–FTM–29–DNF, 2005
WL 1528626 (M.D. Fla. June 27, 2005)). As such, Virgilio does
not stand for the proposition that a direct benefit cannot pass
through an intermediary. See Coffey v. WCW & Air, Inc., No.
3:17-CV-90-MCR-CJK, 2018 WL 4154256, at *9 (N.D. Fla. Aug.
30, 2018) (“[E]ven after Virgilio was decided, the Eleventh Circuit
has found that a plaintiff may have conferred a ‘direct benefit’ on
a defendant through an intermediary where, like in MacMorris,
where the defendant directly profited from and [was] involved in
depriving the plaintiff of the benefit at issue.”).

     We agree that “[i]t would not serve the principles of justice
and equity to preclude an unjust enrichment claim merely
because the ‘benefit’ passed through an intermediary before being
conferred on a defendant.” See Montoya v. PNC Bank, N.A., No.
14-20474-CIV, 2014 WL 4248208, at *13 (S.D. Fla. Aug. 27, 2014)
(alteration in original). Therefore, Appellants’ claim alleging
unjust enrichment satisfies the direct benefit requirement and
dismissal of Count V was error.

                                8
                          Conclusion
    We conclude that the trial court abused its discretion when it
dismissed Appellants’ complaint with prejudice. Nothing in the
record suggests that allowing Appellants to amend their
complaint would prejudice the opposing party, that the privilege
has been abused, or that amendment would be futile.

     Accordingly, we reverse the trial court’s order and remand
this matter for further proceedings consistent with this opinion.

    REVERSED and REMANDED.

EDWARDS, C.J., and HARRIS, J., concur.

                 _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

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