Court Opinion

ID: 3161086
Source: CourtListenerOpinion
Date Created: 2015-12-09 16:04:39.736191+00
Date Added: 2024-06-11T11:56:21.303611
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                            FOURTH DISTRICT

MOHAMMAD ABOUMAHBOUB and FINANCIAL GROUP OF AMERICA,
           LLC, d/b/a BUY-RITE AUTO SALES,
                       Appellants,

                                    v.

                             PAUL HONIG,
                               Appellee.

                             No. 4D15-1763

                           [December 9, 2015]

  Appeal of a non-final order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Catherine M. Brunson, Judge; L.T.
Case No. 50-2012CA-016912-AO.

  Michele K. Feinzig of Law Offices of Robin Bresky, Boca Raton, for
appellants.

    Ronnie D. Dykes of Law Office of Ronnie D. Dykes, P.A., Boca Raton,
for appellee.

WARNER, J.

   Mohammad Aboumahboub and Financial Group of America, LLC
appeal the denial of their motion to vacate an ex parte final judgment
entered based on their default of payment obligations under a mediated
settlement agreement. The trial court abused its discretion in denying the
motion to vacate where the appellants proved, without dispute, that
appellee, Paul Honig, had filed the ex parte motion for entry of a final
judgment even though the appellants had cured the default in accordance
with the settlement agreement’s terms.

   The appellants and Honig entered into a mediated settlement
agreement regarding a business dispute. The appellants agreed to pay a
settlement sum of $56,000 under a specific payment plan.              The
agreement’s payment schedule contemplated that the entire sum would be
paid by November 2014. The agreement included a default cure provision
that required Honig to allow the appellants five days, after delivery of a
written notice of default, to remedy any non-payment. Specifically, the
agreement provided:

      In the event DEFENDANTS fail to make any payment when
      payment is due as required hereunder, the PLAINTIFF shall
      provide DEFENDANTS written notice of the default by mail, fax
      or email at the address provided hereinafter. In the event
      payment is not made or proof of payment provided within five
      (5) days of delivery of notice of non-payment to DEFENDANTS,
      PLAINTIFF shall be entitled to a Final Judgment against the
      DEFENDANTS, jointly and severally, on an ex parte basis
      without further notice or hearing, in the amount of ONE
      HUNDRED          THOUSAND          AND    NO/100     DOLLARS
      ($100,000.00) less the amount of all payments made, plus
      reasonable attorney’s fees and costs incurred in obtaining the
      Final Judgment. An affidavit of PLAINTIFF shall be sufficient
      proof as to the DEFENDANTS’ default as well as the amounts
      due and owing hereunder.

(Emphasis added). This term gave Honig the choice of the method of
notice—“mail, fax or email.” (Emphasis added). The settlement agreement
provided both a specific email address and a physical mailing address for
“[a]ll notices” to the appellants. The default judgment principal amount of
$100,000, less payments made, exacted a substantial penalty or
liquidated damages above the $56,000 settlement figure.

    On March 17, 2014, Honig filed an ex parte Motion for Final Judgment
on Default. The motion alleged that Honig sent a demand letter to the
appellants in accordance with the settlement agreement. He also alleged
that the appellants had “failed to pay in accordance with the Agreement
and refused to make any further payments.” Attached to the motion was
the demand letter; it was addressed as “CERTIFIEDMAIL [sic] RETURN
RECEIPT REQUESTED” to the physical address specified in the settlement
agreement. The letter also listed two email addresses, neither of which
matched the email address included in the settlement. The letter notified
the appellants of their default and demanded payment of $1,800 to cure
within five days, or Honig would file a motion for default judgment
pursuant to the settlement provision quoted above. Also attached to the
motion was a certified return request mailing receipt, indicating that the
letter was mailed on March 8, 2014, and delivered to the appellants on
March 10, 2014. Based upon the motion, the court entered a final
judgment on March 25, 2014, for the default amount due, plus attorney’s
fees and costs.

                                    2
   The appellants moved to vacate the final judgment. They contended
that Honig had misrepresented to the court that the default was not cured.
After receiving the notice on March 10, the appellants paid the default
amount of $1,800 on March 13, 2014. Evidence of that payment was
attached to the motion to vacate.1

   The court held a hearing on the motion to vacate the default. The
appellants testified that they received the certified letter on March 10th
and made the payment demanded on March 13th. Honig’s motion for
default judgment was not filed until March 17th, but it neither mentioned
that the appellants had made the payment, nor revealed that the $1,800
payment was in the amount of the requested payment. Honig discounted
the certified mail notice and testified that his attorney sent the notice to
the two email addresses listed in the letter. Although neither of these
matched the email address in the settlement agreement, they were
addresses that the appellants had successfully used to communicate with
Honig.

    The appellants argued to the court that the email notices were not sent
to the address in the settlement agreement. The certified mail was sent to
the correct address and allowed the appellants five days from March 10th
to pay the amount required, which they did. Therefore, when Honig filed
his motion and affidavit on March 17th, he misrepresented to the court
that the appellants had not cured the default. In the motion, Honig had
stated that the appellants had failed to pay and “refused” to pay. This was
untrue.

   Honig also argued that the appellants had failed to comply with two
notices of default sent in February, neither of which were mentioned in the
motion for final judgment. According to Honig, the appellants were in
default from this earlier time, and therefore the final judgment should not
be vacated. The court took the matter under advisement and later entered
a one-sentence denial of the motion, making no findings. The appellants
appeal the order of denial.

   The decision in this case is controlled by the interplay between two legal
principles, namely that parties have broad discretion in fashioning the
terms of a settlement agreement, while provisions in an agreement that
permit a court to take ex parte action are strictly and narrowly construed.

1We omit a discussion of the modified payment schedule and other email
addresses the parties used to communicate because we deem these matters to
be legally insignificant.

                                     3
      Florida Rule of Civil Procedure 1.540(b) provides as follows:

      On motion and upon such terms as are just, the court may
      relieve a party or a party’s legal representative from a final
      judgment, decree, order, or proceeding for the following
      reasons: (1) mistake, inadvertence, surprise, or excusable
      neglect; . . . (3) fraud (whether heretofore denominated
      intrinsic or extrinsic), misrepresentation, or other misconduct
      of an adverse party . . . .

(Emphasis added). “The standard of review of an order on a rule 1.540(b)
motion is whether there has been an abuse of discretion.” Vilvar v.
Deutsche Bank Trust Co. Ams., 83 So. 3d 853, 854 (Fla. 4th DCA 2011)
(citing J.J.K. Int’l, Inc. v. Shivbaran, 985 So. 2d 66, 68 (Fla. 4th DCA 2008)).
That discretion must be exercised based upon facts ascertainable from the
record. Moss v. State Farm Mut. Auto Ins. Co., 328 So. 2d 495, 496 (Fla.
4th DCA 1976).

   Federal Home Loan Mortgage Co. v. Molko, 602 So. 2d 983 (Fla. 3d DCA
1992), succinctly states the law regarding interpretation of settlement
agreements:

      Settlement agreements “are governed by the rules for
      interpretation of contracts.” Robbie v. City of Miami, 469 So.
2d 1384, 1385 (Fla. 1985). The clear expression of the
      meaning of a contract may not be modified by court
      interpretation, Pafford v. Standard Life Ins. Co., 52 So. 2d 910
      (Fla. 1951); BMW of N. Am., Inc. v. Krathen, 471 So. 2d 585,
      587 (Fla. 4th DCA 1985), review denied, 484 So. 2d 7 (Fla.
      1986); “[i]f the terms are clear and unambiguous, the express
      terms control.” Avery Dev. Co. v. Bast, 582 So. 2d 150, 151
      (Fla. 4th DCA 1991).

Id. at 983. The settlement agreement provided for written notice of default
to be sent to the addresses provided in the agreement, and specified that
all notices be sent to those addresses. Honig did not send his notice to
the email address in the agreement. Rather, his attorney emailed the
notice to two other addresses and sent it by certified mail to the physical
address listed in the agreement. Only the certified letter complied with the
terms of the settlement agreement.

  Recognizing this fact, Honig’s motion for default final judgment did not
mention email service but relied on the return receipt from the certified
mail, which was sent to the physical address in the settlement agreement,

                                       4
to establish delivery of the notice to the appellants on March 10th. Honig
swore that the appellants had not made any payment and refused to make
further payments, despite the fact that he had received the specified
default payment four days prior to the filing of the motion and within the
five-day cure period. This constituted a misrepresentation which should
have resulted in the vacation of the final judgment. The trial court abused
its discretion in denying the motion when the facts from the record
conclusively established the misrepresentation.

   At the hearing, Honig backed away from his motion for final judgment
by claiming, alternatively, that he relied on the email of the notice to
addresses other than the one contained in the settlement agreement. The
email was sent on March 6th and thus required a cure of the default by
March 11th. However, for the court to rely on either email address to
conclude that notice was sufficient would contravene the express terms of
the agreement. The court cannot modify the express terms of the
agreement. Molko, 602 So. 2d at 983. Also, even using March 6th as the
date of email delivery, the five-day cure period would have expired on
March 11th, the day after the certified letter was delivered. At the very
least, the appellants would have a case of mistake or excusable neglect
when they measured the time to cure from the date of delivery of the
certified letter, which complied with the terms of the agreement, rather
than the March 6th date, which was based on the use of email addresses
not contained in the settlement agreement.

    This was, after all, an ex parte motion for entry of final judgment. Due
process requires strict compliance with any agreement that permits the
entry of an ex parte judgment. Entry of ex parte orders are very much
disfavored in the law. This is one lesson of Fricker v. Peters & Calhoun Co.,
21 Fla. 254 (1885). There, the Florida Supreme Court described the rule
requiring notice to a defendant before an application for a receiver as “very
strict,” subject to narrow exceptions such as “in a case of grave emergency,
demanding the immediate interference of the court for the prevention of
irreparable injury.” Id. at 256-57; see also Fla. R. Civ. P. 1.610(a)(1)
(concerning temporary injunctions without notice); Mercy Lu Enters., Inc.
v. Liberty Mut. Ins. Co., 681 So. 2d 758, 759 (Fla. 4th DCA 1996) (observing
that “[d]ue process values” require “strict compliance with the statutory
requirements” of substituted service of process). Where strict compliance
with the notice terms of an agreement is not observed, the ex parte
judgment must be vacated.

   For these reasons, the trial court abused its discretion in denying the
motion to vacate the default final judgment. We reverse and remand for
the vacation of the judgment.

                                     5
GROSS and KLINGENSMITH, JJ., concur.

                         *        *       *

  Not final until disposition of timely filed motion for rehearing.

                                  6