Court Opinion

ID: 8482786
Source: CourtListenerOpinion
Date Created: 2022-11-10 14:01:39.525328+00
Date Added: 2024-06-11T16:49:41.402605
License: Public Domain

Third District Court of Appeal
                             State of Florida

                    Opinion filed November 10, 2022.

                           ________________

                             No. 3D20-630
                      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 Law Firm, and J. Luis Quintana; Schlesinger Law Group, and
Michael J. Schlesinger; Shutts & Bowen LLP, and Julissa Rodriguez, 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 FERNANDEZ, C.J., and SCALES and GORDO, JJ.

     GORDO, J.
                       ON MOTION FOR REHEARING

      We deny PMG-S2 Sunny Isles, LLC’s motion for clarification, rehearing

and rehearing en banc, but withdraw our previous opinion, and substitute the

following opinion in its stead.

INTRODUCTION

      Stephen Hess, Clearwater Beach Company, LLC, Muse 1901, LLC,

Muse 2101, LLC and Muse 2201, LLC appeal a final judgment in favor of

PMG-S2 Sunny Isles, LLC.          We have jurisdiction. Fla. R. App. P.

9.030(c)(1)(A). We affirm the trial court’s order awarding summary judgment

in PMG’s favor in all regards. We find, however, the trial court erred in not

allowing the Muse entities to amend their pleadings regarding calculation of

the return of the deposits and therefore remand with instructions to allow

amendment.

             FACTUAL AND PROCEDURAL BACKGROUND

      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. Hess paid

PMG $6.1 million in deposits for the units.

                                      2
        The terms of the agreements barred assignment and amendment

without the consent of PMG and a signed written instrument.             Per the

agreements, if Hess and Clearwater defaulted, PMG was entitled to

terminate the agreements and apply a specific damages clause to calculate

PMG’s damages. Four subsequent amendments to the agreements were

made, and three were sent to Hess and Clearwater. In the first, PMG agreed

Hess could assign its interest in the agreements to an affiliated domestic

corporate entity. The second detailed modifications regarding an institutional

mortgagee. The third only affected future purchasers and was not sent to

Hess or Clearwater and the fourth detailed changes to the property

management agreement and reflected the unit’s final square footage.

Neither Hess nor Clearwater sent any written notice to rescind the

agreements due to these amendments.

        In May 2018, Hess and Clearwater assigned their “rights, title, interests

and obligations” under the agreements to Muse 1901, Muse 2101 and Muse

2201 (the “Muse entities”). 1 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.

1
    All three Muse entities are wholly owned by Hess.

                                        3
        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 clause in the agreements. 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. 2 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.

2
    In granting the motion to dismiss the trial court stated:

              THE COURT: What about the fact that it’s
              premature? We’re not even there yet. And why
              should I, in this instance, give you an advisory
              opinion of how I think it should go assuming that
              you’re not fully compensated pursuant to the
              contract?
              ...
              Why don’t we make that determination if we
              determine that there is a breach? In other words, we
              can litigate the case based upon the other three
              allegations in the complaint. If the Court finds that
              there is a breach, then we can litigate the issue of
              whether or not when the breach occurred and
              what damages you are entitled to.

(emphasis added).

                                         4
     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. This appeal followed.

                            LEGAL ANALYSIS

     We review the entry of summary judgment de novo. See Volusia Cnty.

v. Aberdeen at Ormand Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).3 We

review for abuse of discretion a trial court’s denial of leave to amend a

pleading. See Jain v. Buchanan Ingersoll & Rooney PC, 322 So. 3d 1201,

1204 (Fla. 3d DCA 2021), reh’g denied (July 27, 2021). We affirm without

further discussion the trial court’s ruling that PMG was properly entitled to

3
  “Where the trial court has adjudicated the summary judgment motion prior
to the new rule’s May 1, 2021, effective date (as the trial court did in this
case), we apply the pre-amendment rule in our review on appeal.” De Los
Angeles v. Winn-Dixie Stores, Inc., 326 So. 3d 811, 813 (Fla. 3d DCA 2021).

                                     5
summary judgment as a matter of law on the issues raised. We reverse,

however, as the Muse entities should have been allowed to amend their

pleadings.

      Florida Rule of Civil Procedure 1.190(a) requires courts to allow

amendment of pleadings which “shall be given freely when justice so

requires.” This Court has considered some exceptions to this rule, such as

abuse of the privilege to amend, futility of the proposed amendment and

prejudice to the opposing party. See Grove Isle Ass’n, Inc. v. Grove Isle

Assocs., LLLP, 137 So. 3d 1081, 1090 (Fla. 3d DCA 2014) (“A trial court

should give leave to amend a deficient complaint unless . . . the complaint

shows on its face that there is a deficiency which cannot be cured by

amendment.” (quoting Unitech Corp. v. Atl. Nat’l Bank of Miami, 472 So. 2d

817, 818 (Fla. 3d DCA 1985))); Annex Indus. Park, LLC v. City of Hialeah,

218 So. 3d 452, 453 (Fla. 3d DCA 2017) (“‘Leave to amend should not be

denied unless the privilege has been abused or the complaint is clearly not

amendable.’” (quoting Osborne v. Delta Maint. and Welding, Inc., 365 So. 2d

425, 427 (Fla. 2d DCA 1978))); Carib Ocean Shipping, Inc. v. Armas, 854

So. 2d 234, 236 (Fla. 3d DCA 2003) (noting “amendments may be denied

when there is a sufficient showing of prejudice to the opposing party”); Vella

v. Salaues, 290 So. 3d 946, 949 (Fla. 3d DCA 2019) (“‘[W]hile the policy in

                                      6
Florida is to liberally allow amendments to pleadings where justice so

requires, a trial judge in the exercise of sound discretion may deny further

amendments [where the same materially varies from the relief initially

sought, or] where a case has progressed to a point that the liberality

ordinarily to be indulged has diminished.’” (quoting Alvarez v. DeAguirre, 395

So. 2d 213, 216 (Fla. 3d DCA 1981))).

     Importantly, in Jain we found the trial court did not abuse its discretion

in denying a plaintiff’s motion to amend her pleadings after summary

judgment was entered in the defendant’s favor where the plaintiff conceded

“in her brief that she only sought leave to amend because she saw the

‘handwriting on the wall’” and the “proposed amendment would advance new

issues that contradict her prior unsuccessful theories.” Jain, 322 So. 3d at

1206. This Court determined “[a] party who opposes summary judgment will

not be permitted to alter the position of his or her previous pleadings,

admissions, affidavits, depositions or testimony in order to defeat a summary

judgment.” Id.

     Here, the Muse entities moved to amend their pleadings after the entry

of summary judgment, but the purpose of their amendment was not to

advance a new issue or otherwise undermine the trial court’s summary

judgment liability determination. Rather, the amendment sought to have the

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deposits distributed consistent with the terms of the default provision

following the trial court’s determination the purchase agreements were not

rescinded. The Muse entities’ motion to amend was consistent with the trial

court’s position at the hearing on the motion to dismiss, which stated that

entitlement to the deposits should be litigated after the issue of breach was

determined. 4

      Under the specific facts of this case, where an initial complaint seeking

a judicial determination of the disposition of the deposits was filed, the trial

court dismissed the count as premature as the application of the default

provisions were uncertain and events transpired during the pendency of the

action adding Hess’s wholly owned Muse entities as parties and rendering

the default provisions ripe for enforcement, we conclude it was error not to

allow amendment by the Muse entities.

      Affirmed in part, reversed in part, and remanded with instructions.

4
  We note at oral argument Counsel for PMG contended all $6.1 million of
Hess’s deposits were necessarily forfeited because any arguments
regarding their return would be barred under the doctrine of res judicata. We
express no opinion as to this res judicata argument as it was not before us
and to do so would be advisory. The interests of justice, however, are
necessarily implicated here where a party argued all terms of a purchase
agreement are enforceable, but now seeks to evade the impact of some
provisions and obtain a windfall. Given that “any doubts should be resolved
in favor of the amendment,” the Muse entities should have been granted
leave to amend their complaint. Overnight Success Const., Inc. v. Pavarini
Const. Co., Inc., 955 So. 2d 658, 659 (Fla. 3d DCA 2007).

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