Court Opinion

ID: 3202527
Source: CourtListenerOpinion
Date Created: 2016-05-11 15:04:07.766142+00
Date Added: 2024-06-11T14:29:05.338660
License: Public Domain

Third District Court of Appeal
                               State of Florida

                           Opinion filed May 11, 2016.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                                No. 3D15-996
                         Lower Tribunal No. 10-58483
                             ________________

                       Pinnacle Three Corporation,
                                    Appellant,

                                        vs.

                       EVS Investments, Inc., et al.,
                                    Appellees.

      An Appeal from the Circuit Court for Miami-Dade County, Jon I. Gordon,
Senior Judge.

      Heller Waldman and Glen H. Waldman, Jason Gordon and Michael A.
Sayre, for appellant.

      Tobin & Reyes and Ricardo A. Reyes and Stefanie R. Shelley (Boca Raton),
for appellees.

Before ROTHENBERG, SALTER and SCALES, JJ.

      SALTER, J.
      Pinnacle Three Corporation, a plaintiff below, appeals circuit court orders

denying Pinnacle’s motion for an award of attorney’s fees and costs incurred in a

post-judgment dispute regarding a settlement agreement.       Four of the settling

defendants below, appellees here, filed a motion to enforce the settlement

agreement. The trial court denied the motion finding that (a) the relief sought by

the appellees, including significant discovery, substantially exceeded the scope of

the settlement agreement; (b) the provisions of the settlement agreement and

dismissal order regarding retention of jurisdiction were limited to enforcement of

the specific terms of the agreement; and (c) the appellees’ claims were required to

be prosecuted in a separate lawsuit rather than through a motion to enforce the

settlement agreement. Next, the trial court denied Pinnacle’s motion for attorney’s

fees and costs incurred in resisting the appellees’ motion to enforce, without

prejudice to Pinnacle’s attorney’s fee claims in any such new and separate lawsuit.

      We reverse and remand the order denying Pinnacle’s motion for its

attorney’s fees (as well as the order denying rehearing regarding Pinnacle’s

motion), concluding that Pinnacle was the prevailing party in the dispute relating

to the appellees’ motion to enforce.1 The clear and unambiguous terms of the

1  The appellees appealed the denial of their motion to enforce the settlement
agreement in Century Drive Retail Corp. v. Pinnacle Three Corp., Case No. 3D15-
1026, 2016 WL 1126281. A separate panel of this Court affirmed, per curiam, on
March 23, 2016, and granted Pinnacle’s motion for appellate attorney’s fees in
connection with that case.

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settlement agreement entitled Pinnacle to an award of its reasonable attorney’s fees

and costs incurred in opposing the appellees’ motion.

      The Settlement Agreement

      In 2010, Pinnacle and its co-plaintiffs2 prosecuted a lawsuit in the circuit

court against numerous defendants,3 including the four appellees. The parties’

original disputes involved alleged diversions of cash, fraudulent misconduct, and

corporate mismanagement relating to adult bookstores and video stores in Florida

and other states.

      After two years of motions and pretrial discovery comprising over fifty

volumes and 9,000 pages in the record below, the parties entered into a settlement

agreement and stipulated to the dismissal of the lawsuit with prejudice. The

stipulation and order ratifying it specified that the court reserved jurisdiction “to

enforce the terms of the Settlement Agreement between the parties.”4

      The settlement agreement included requirements for payments by certain

defendants to plaintiff Saifoutdinov, as evidenced by secured promissory notes; the

2 Rodion Sokrovichtchouk, Aidar Saifoutdinov, Leon Goldstein, and Optivest
South, Inc.
3    The settlement agreement identified 19 corporations (including the four
corporate appellees), Evgueni Souiaguine, and Tatiana Sulyagina, as co-
defendants.
4The settlement agreement also settled a 2011 lawsuit between many of the same
parties, Sokrovichtchouk v. Souliaguine, Case No. 11-32638-CA-40, in the Miami-
Dade Circuit Court.

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cancellation of various existing Russian-language notes and one payable in rubles

to Saifoutdinov; and certain cash and secured promissory note payments to

Pinnacle by the four appellees. The plaintiffs agreed not to compete with the

defendants in the adult bookstore business until the promissory notes payable by

the applicable by defendants were satisfied.      Florida law was to govern the

settlement agreement, with jurisdiction retained to enforce the agreement.

      Paragraph 7 of the settlement agreement provided:

      7. Breach of the Settlement Agreement – Attorney’s Fees and Costs.
      In the event of a dispute arising from or under the Settlement
      Agreement, the prevailing party shall be entitled to recover its
      reasonable attorney’s fees and costs incurred, including, but not
      limited to, litigating entitlement to attorney’s fees and costs and in
      determining or quantifying the amount of recoverable attorney’s fees
      and costs. The reasonable costs to which the prevailing party is
      entitled shall include costs that are taxable under any applicable
      statute, rule, or guideline.

      It is undisputed that the settlement agreement was negotiated by

sophisticated parties and experienced counsel in order to resolve a multi-million

dollar commercial dispute.

      The Motion to Enforce and the Discovery Requests

      The four appellees’ motion to enforce the settlement agreement was filed

eleven months after the settlement agreement was approved by the trial court.

Although the appellees alleged breaches of the settlement agreement by Pinnacle

on matters that did not involve non-competition, violation of the mutual releases,

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or payment, the relief sought by the appellees was an order “releasing the

[appellees] from all further payment obligations” or excusing the appellees from

payment obligations until the alleged breaches were cured.

      After filing the motion to enforce, the appellees served extensive discovery

requests on Pinnacle. Pinnacle sought a protective order, and these issues were

considered by a special magistrate. Ultimately, the trial court properly concluded

that the relief sought by the appellees involved matters beyond the terms of the

settlement agreement and thus beyond the jurisdiction retained by the court. The

trial court denied the appellees’ motion to enforce without prejudice to the

appellees’ rights to pursue their claims in a separate action. The trial court also

ruled that the appellees were to continue making settlement payments to Pinnacle

as required by the settlement agreement.

      Following that order, Pinnacle moved for reimbursement of its attorney’s

fees and costs pursuant to paragraph 7 of the settlement agreement. The trial court

denied Pinnacle’s motion (and a later motion for rehearing) without prejudice to

Pinnacle’s claim for reimbursement if it prevails in a subsequent and separate

lawsuit. This appeal followed.

      Analysis

      A trial court’s ruling on a motion for attorney’s fees is ordinarily reviewed

under the abuse of discretion standard. “However, where entitlement depends on

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the interpretation of a statute or contract the ruling is reviewed de novo.” Mihalyi

v. Lasalle Bank, N.A., 162 So. 3d 113, 114 (Fla. 4th DCA 2014) (citing Stevens v.

Zakrewski, 826 So. 2d 520, 521 (Fla. 4th DCA 2002)).

      In the present case, we review the trial court’s ruling de novo, as it depends

on the interpretation of paragraph 7 of the settlement agreement. “Because a

settlement agreement is contractual in nature, it is interpreted and governed by

contract law.” Muñoz Hnos., S.A. v. Editorial Televisa, 121 So. 3d 100, 103 (Fla.

3d DCA 2013).

      Paragraph 7 is quite clear. If you start a dispute claimed to be “arising from

or under the Settlement Agreement,” and if you lose that dispute, you pay. And

that is what happened. Pinnacle prevailed, because that dispute was resolved in its

favor. The appellees obtained no relief and were, in fact, advised that the relief

they sought could only be sought in a new lawsuit—which might or might not be

filed. The trial court denied the motion to enforce “without prejudice, for the

Defendants to file a separate action.” If such an action is filed, and if that dispute

arises from or under the settlement agreement, the prevailing party in that separate

and subsequent action may also seek attorney’s fees and costs.

      The trial court was entirely correct that the appellees’ motion to enforce

went well beyond the specific obligations of the parties detailed in the settlement

agreement. See Sarhan v. H&H Inv’rs, Inc., 88 So. 3d 219 (Fla. 3d DCA 2011).

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The trial court’s retention of jurisdiction to enforce the agreement is circumscribed

by the terms of the settlement agreement itself. Paulucci v. Gen. Dynamics Corp.,

842 So. 2d 797, 803 (Fla. 2003).

      That said, however, Pinnacle’s motion to recover its attorney’s fees and

costs incurred in the post-settlement dispute initiated by the appellees is within the

scope of jurisdiction retained by the trial court. When that is the case, “[t]he public

policy of the State of Florida, as articulated in numerous court decisions, highly

favors settlement agreements among parties and will seek to enforce them

whenever possible.” Sun Microsystems of Cal., Inc. v. Eng’r & Mfg. Sys., C.A.,

682 So. 2d 219, 220 (Fla. 3d DCA 1996).

      We are unpersuaded by the appellees’ reliance on cases such as Moritz v.

Hoyt Enterprises, Inc., 604 So. 2d 807 (Fla. 1992), and Baldoria v. Security Realty

Investment, Inc., 581 So. 2d 189 (Fla. 3d DCA 1991). In Moritz and a line of cases

similar to it, the “prevailing party” issue is complicated by the fact that each

adversary has prevailed on one or more claims for relief against the other. Those

fact patterns require a determination as to which party has prevailed “on the

significant issues in the litigation.” Moritz, 604 So. 2d at 810. In Baldoria, neither

party obtained relief against the other, though Ms. Baldoria obtained a jury verdict

and judgment against her real estate agent in the amount of her escrow deposit.

While Ms. Baldoria obtained relief as a plaintiff, her agreement with her realtor (as

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opposed to her contract with the seller) had no provision for an award of attorney’s

fees.

        The present case is more readily analogous to Mihalyi, supra, and Nudel v.

Flagstar Bank, 60 So. 3d 1163 (Fla. 4th DCA 2011),5 in which defendants were

held to “prevail” for purposes of a similar fee-shifting analysis after the respective

plaintiffs voluntarily dismissed their lawsuits. Although the case at hand was

essentially an involuntary dismissal, the identification of the prevailing party

obtaining that result is not in question.

        For these reasons, we reverse the order denying Pinnacle’s motion for an

award of its reasonable attorney’s fees and costs, and we remand for proceedings to

determine the amount of such fees and costs.

        Reversed and remanded.

5  In a notice of supplemental authority filed the morning of oral argument, the
appellees cited a federal opinion which distinguished Nudel, Spartan Holdco, LLC,
v. Cheeburger Cheeburger Restaurants, Inc., 2011 WL 6024487 (M.D. Fla. 2011).
However, the Magistrate Judge’s beef in refusing to award attorney’s fees in that
case was that neither party had properly addressed the threshold jurisdictional
defect regarding the dispute. Also, the applicable statutory basis for the award
sought in that case provided that a court “may” allow attorney’s fees to a
prevailing party. In contrast, paragraph 7 of the settlement agreement at issue here
is non-discretionary—“the prevailing party shall be entitled to recover its
reasonable attorney’s fees . . . .”

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