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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-13536
________________________
D.C. Docket No. 9:17-cv-81135-RLR
M & M REALTY PARTNERS AT HAGEN RANCH, LLC,
a New Jersey limited liability company,
Plaintiff – Appellant,
versus
WILLIAM MAZZONI,
as Co-Trustee of the William Mazzoni Trust
dated 06/04/1992,
THOMAS A. SMITH,
as Co-Trustee of the William Mazzoni Trust
dated 06/04/1992,
WILLIAM MAZZONI,
Individually,
WILLIAM MAZZONI TRUST DATED 06/04/1992,
Defendants – Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(December 11, 2020)
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Before TJOFLAT, NEWSOM, and GINSBURG,* Circuit Judges.
GINSBURG, Circuit Judge:
M&M Realty Partners at Hagen Ranch, LLC, a New Jersey Limited
Liability Company, entered into a contract with the William Mazzoni Trust in 2011
for the purchase of a plot of land in Boynton Beach, Florida. The contract included
a six-year period for M&M to secure the permits necessary to develop the
property. M&M alleges, and the Trust disputes, that M&M sought to close the
transaction in conformance with the contract and the Trust refused. M&M seeks
specific performance of the land sale contract and damages from the Mazzoni
Trust, as well as damages from William Mazzoni, as co-trustee and agent of the
Trust, for tortious interference with the land sale contract.
As did the district court, we hold M&M failed to make out a prima facie
claim for specific performance or for damages for breach of contract because
M&M did not provide evidence that it was ready, willing, and able to perform
under the contract -- specifically, that it had the necessary funds to make the
purchase. We also hold William Mazzoni, as a co-trustee of the Defendant trust
and signatory as its agent on the contract, is not liable for tortious interference. We
therefore affirm the judgment of the district court.
*Honorable Douglas H. Ginsburg, United States Court of Appeals for the District of Columbia
Circuit, sitting by designation.
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I.
In August 2011, M&M entered into a contract to buy from the Mazzoni
Trust a plot of land that M&M planned to develop into a shopping center. M&M is
a New Jersey Limited Liability Company the two members of which are also
Limited Liability Companies, to wit, JMP at Hagan Ranch, LLC, and JSM at
Hagan Ranch, LLC. JMP’s only member is the Joseph Marino Family Trust, of
which Joseph Marino is the sole trustee, and the beneficiaries of which are
Marino’s minor children. JSM’s two members and owners are Jack Morris and
Sheryl Weingarten.
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The contract provided a “contingency period” of six years for M&M to
secure the necessary permits and approvals for its proposed development. The
purchase price was $5 million, with a potential increase based upon the projected
future revenue of the property once developed.
M&M alleges, and the Mazzoni Trust disputes, that the land sale contract
allowed M&M to close the sale at any time prior to the expiration of the six-year
contingency period. The Trust argues the provision of the contract increasing the
price based upon revenue from M&M’s development of the land indicates M&M
had to secure the necessary permits and approvals before it could close the sale.
M&M alleges that from 2011 through 2017 it expended substantial sums to
secure the permits and approvals necessary to develop the land. Meanwhile, it says
the Mazzoni Trust received a better offer for the land and, in pursuit of that offer,
attempted to avoid closing on its contract to sell the property to M&M. The Trust
acknowledges, and the district court found, that the Trust attempted to withdraw
from the contract in 2013 because it did not want to do business with M&M after
M&M failed to file progress reports on its development of the property and Morris
and Marino had sued it over an unrelated matter. For his part, William Mazzoni
admits he removed from the property official notices of public meetings as well as
“for lease” signs and on one occasion refused to sign documents related to M&M’s
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efforts to get needed permits.1 M&M further alleges that, having secured the
necessary approvals, in May 2017 it notified the Trust of its desire to close the sale
that October. According to M&M, in June the Trust refused to close on the
grounds that the notice was deficient and that M&M had failed to complete some
of the contingencies under the agreement.
M&M then sued the Trust for specific performance and damages for breach
of the contract of sale and sued William Mazzoni seeking damages for his
allegedly tortious interference with that contract. All three parties moved for
summary judgment.
The district court held M&M failed to make out a prima facie claim for
specific performance or damages for breach of contract because it had not shown it
was ready, willing, and able to perform under the contract. More specifically, the
court held evidence that Messrs. Marino and Morris had funds available for the
closing was not sufficient to establish that M&M, the actual purchaser, had the
funds necessary to close. The district court also held that under the circumstances,
William Mazzoni, as the agent for a party, could not be liable for tortious
interference with the contract; given the Trust’s business reason for no longer
wanting to close on the contract – namely, Marino and Morris’s unrelated suit
1
M&M was able nonetheless to get the necessary permits because the contract of sale appointed
M&M as Mazzoni’s “authorized signatory.”
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against the Trust – he cannot be said to have acted solely out of malice, as required
by Florida law. Accordingly, the district court entered summary judgment for both
the Mazzoni Trust and William Mazzoni. For the reasons below we affirm.
II.
We review a grant of summary judgment de novo, drawing reasonable
inferences in favor of the non-moving party, here the Plaintiff M&M. Ellis v.
England,
432 F.3d 1321, 1325 (11th Cir. 2005). The substantive law governing
this diversity case is that of Florida.
A.
To establish a prima facie claim for specific performance of a contract or for
damages for breach of a contract, Florida law requires the plaintiff to show it was
ready, willing, and able to perform the contract. See, e.g., Hollywood Mall, Inc. v.
Capozzi,
545 So. 2d 918, 920 (Fla. Dist. Ct. App. 1989); Lusigman v. Lusigman,
972 So. 2d 1076, 1077–78 (Fla. Dist. Ct. App. 2008). A purchaser may show it is
financially ready and able by showing it has (1) the necessary “cash in hand,” (2)
“personal[] possess[ion] of assets . . . and a credit rating” that show a “reasonable
certainty to command the requisite funds,” or (3) “a binding commitment . . . by a
financially able third party.” Capozzi,
545 So. 2d at 920–21 (emphasis omitted). It
is undisputed that M&M, the purchaser in this case, had neither (1) the necessary
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$5 million of cash in hand nor (2) assets and a credit rating sufficient to command
that sum. Therefore M&M’s only hope is to show it had (3) a binding commitment
from a financially able third party.
M&M argues that it was ready, willing, and able to perform under the
contract, first, because Morris and Marino could command credit from a bank in
excess of $5 million and, second, because Morris and Marino each had over $5
million in cash. As M&M is relying upon the resources of third parties, namely
Morris and Marino, to show it was ready, willing, and able to close, M&M’s
arguments properly go to the third possible showing, i.e., that it has a binding
commitment from a financially able third party. M&M argues that its principals’
personal resources are sufficient to show the company had a “reasonable certainty”
of being able to complete the purchase, but this falls short of the “binding
commitment” the law requires. Capozzi,
545 So. 2d at 920-21 (emphasis omitted).
Mere possession of funds by Morris or Marino does not establish that either
man had made a binding commitment – or, indeed, any commitment – to lend or
give those funds to M&M in order to close the deal. M&M relies upon Marino
having been the trustee and Morris a member-owner, respectively, of the two
members of the purchasing LLC, M&M, but to no avail. In Capozzi, a company
was held unable “to perform when its only ability [was] derived from funds not
within its control and subject to the gratuitous payment by another.”
Id. at 920. In
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that case, the non-binding commitment by Capozzi, chairman of the board of the
purchasing corporation -- which was wholly owned by his children -- to provide
funds to close the transaction was insufficient to establish the purchasing
company’s ability to “command” the requisite funds.
Id. at 919–20. It necessarily
follows that in this case, where there is no commitment from Morris or Marino,
M&M was not ready, willing, and able to close the purchase.
M&M argues the lack of binding commitment was “only part of the court’s
analysis” in Capozzi; it went on to consider Capozzi’s financial ability to close the
transaction, which it found wanting. In contrast, Morris and Marino say they
“confirmed” that they each possessed sufficient funds to close the sale. M&M
argues the ability of Marino and Morris to command the necessary funds satisfied
the more flexible standard the Florida Supreme Court set out in Perper v. Edell,
where it said a purchaser need not be “standing outside of the office door with all
the cash in hand” but should be considered financially able if it can “command the
necessary money to close the deal on reasonable notice.”
35 So. 2d 387, 391 (Fla.
1948).
M&M once again, however, fails to explain how it, as the purchaser of the
property, could “command” the funds of Marino or Morris, neither of whom had
made a binding commitment to provide those funds. Although both gentlemen
undeniably have an interest in M&M’s business, their legal relationship to M&M is
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mediated through two limited liability companies and a trust. As the district court
pointed out, if the situation were reversed and the Trust were suing M&M for
specific performance and damages, it clearly would be inappropriate to pierce
those corporate veils; so too is it inappropriate to disregard the corporate forms
Marino and Morris used here to insulate themselves from the would-be corporate
purchaser. Motorola Mobility LLC v. AU Optronics Corp.,
775 F.3d 816, 820 (7th
Cir. 2015) (citation omitted) (“[A] corporation is not entitled to establish and use
its affiliates’ separate legal existence for some purposes, yet have their separate
corporate existence disregarded for its own benefit against third parties.”).
M&M’s failure to show it was ready, willing, and able to perform under the
contract is fatal to its claims for damages and specific performance under the
contract. Therefore, we do not need to address the Trust’s argument that the
contract terminated before M&M satisfied the conditions precedent to closing.
B.
We turn now to M&M’s claim against William Mazzoni for tortious
interference with its contract to purchase land from the Mazzoni Trust. In
response, Mazzoni points out that under Florida law neither a party to a contract
nor its agent can be held liable for interfering with his own contract. Ernie Haire
Ford, Inc. v. Ford Motor Co.,
260 F.3d 1285, 1294 (11th Cir. 2001) (“Under
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Florida law, a claim for tortious interference with contract cannot lie where the
alleged interference is directed at a business relationship to which the defendant is
a party”); Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A.,
742 So. 2d
381, 385-86 (Fla. Dist. Ct. App. 1999) (holding a party’s agent cannot tortiously
interfere because “the interfering defendant must be a third party, a stranger to the
business relationship”); see also Walter v. Jet Aviation Flight Servs., No. 9:16-CV-
81238,
2017 WL 3237375, at *8 (S.D. Fla. July 31, 2017); Hamilton v. Suntrust
Mortg. Inc.,
6 F. Supp. 3d 1312, 1320 (S.D. Fla. 2014).
In this case William Mazzoni signed the contract as a trustee of the Mazzoni
Trust and acted as the agent of the Trust. Given the Trust’s economic interest in
terminating the contract, demonstrated by its 2013 effort to end the deal, William
Mazzoni’s attempts to thwart the contract were not actions taken out of malice
alone, or solely for ulterior purposes. William Mazzoni cannot, therefore, be held
liable for tortious interference with the contract.
C.
M&M next argues its claim for tortious interference with contract will lie
against Mazzoni because he comes within an exception for a party or agent who
used “improper means” to thwart the contract, Ethyl v. Balter,
386 So. 2d 1220,
1225 (Fla. Dist. Ct. App. 1980), here referring us to various things Mazzoni did to
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frustrate M&M’s efforts to get the permits it needed. Mazzoni responds that,
because M&M never advanced the “improper means” exception in the district
court, the issue has been forfeited and cannot be raised on appeal. M&M replies
that it raised the issue in the district court by citing caselaw applying it.
Resolving this dispute over forfeiture would require the court to decide
whether the improper means exception is a “new issue” and therefore forfeit, or is
merely a “new argument” for why M&M should win on the issue of tortious
interference, and therefore properly before us. See in re Home Depot,
931 F.3d
1065, 1086 (11th Cir. 2019) (“There is a difference between raising new issues and
making new arguments on appeal. If an issue is properly presented, a party can
make any argument in support of that issue.”) (cleaned up).
We need not, however, engage in that line-drawing exercise because the
improper means exception is totally inapposite to this case. As mentioned in Part
II.B, Mazzoni acted as an agent of the Trust. Indeed, for the purposes of this case,
Mazzoni basically is the trust. Dist. Ct. Op. at 16 (“[T]he crux of Plaintiff’s
position is that Defendant Mazzoni essentially tortiously interfered with himself”).
M&M concedes as much. Br. of Appellant at 27 (“We do not challenge here the
trial court’s decision that Mr. Mazzoni’s interest as trustee was equivalent to an
interest in the trust’s contract”). The improper means exception simply does not
apply to the agent of a party to the contract.
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Under Florida law, a person with “any beneficial or economic interest in, or
control over,” a contractual relationship is not considered a “stranger” to the
contract and therefore has a “privilege to interfere” in that relationship. Hamilton,
6 F. Supp. 3d at 1320. Being neither a contracting party nor someone acting on
behalf of a party, such a person is aptly described as an “interested third party.”
Palm Beach Cty. Health Care Dist. v. Prof’l Med. Educ., Inc.,
13 So. 3d 1090,
1094 (Fla. Dist. Ct. App. 2009). The rationale for the privilege is to allow
interested third parties to interfere to “protect their own economic interests.”
Hamilton, 6 F. Supp. 3d at 1320; see also Palm Beach Cty.,
13 So. 3d at 1095. The
improper means doctrine is an exception to this broader privilege. See Ethyl,
386
So. 2d at 1225 (“So long as improper means are not employed, activities taken to
safeguard or promote one’s own financial, and contractual interests are entirely
non-actionable”) (cleaned up and footnote omitted). This exception does not affect
the core rule that a tortious interference claim does not lie against an agent acting
within the scope of his agency, which stems from the bedrock understanding that a
contracting party is never liable for interfering with its own contract. While
interested third parties are not complete strangers to the contract, holding them
liable for interference when they use improper means is consistent with this
fundamental understanding because, unlike agents, they are not identified with the
contracting parties themselves.
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All the cases M&M cites for the improper means argument concern
interested third parties rather than agents acting on behalf of a contracting party.
For example, in KMS Restaurant Corp. v. Wendy’s International, Inc., Wendy’s
claimed a privilege to interfere with KMS’s purchase of franchise restaurants from
Citicorp because it was the franchisor and the purchase contract was conditioned
on its approval.
361 F.3d 1321, 1322, 1325-27 (11th Cir. 2004). The other cases
are no different. See Ethyl,
386 So. 2d 1221-23 (interference by creditor with
agreement between officer of bankrupt corporation and his financier); G.M. Brod
& Co. v. U.S. Home Corp.,
759 F.2d 1526 (11th Cir. 1985) (interference by
developer of a lodge with management company’s relationships with company’s
employees and unit owners); Bluesky Greenland Env’t. Sols., LLC v. 21st Century
Planet Fund, LLC,
985 F. Supp. 2d 1356 (S.D. Fla. 2013) (interference with
distributorship agreement by competing distributor); Making Ends Meet, Inc. v.
Cusick,
719 So. 2d 926 (Fla. Dist. Ct. App. 1998) (interference by landlord with
lessee’s proposed sale of lease); McCurdy v. Collis,
508 So. 2d 380 (Fla. Dist. Ct.
App. 1987) (interference by Exxon with relationship between welding
subcontractor’s employee and his employer). By contrast, the facts of Salit
illustrate that interference liability based on improper methods does not apply to
agents of a party. The court held a corporate employee’s interference claim against
the corporation’s general counsel for inducing the termination of his employment
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was not adequately pleaded unless the employee added allegations that the general
counsel was not acting in the corporation’s interests, even though the general
counsel allegedly engaged in fraudulent misrepresentation. Salit,
742 So. 2d at
383, 385-86; see also Hurchalla v. Lake Point Phase I, LLC,
278 So. 3d 58, 67
(Fla. Dist. Ct. App. 2019) (noting fraudulent misrepresentation is “ordinarily a
wrongful means of interference”).
M&M’s improper-methods claim is effectively an attempt to impose tort
liability on Mazzoni for the Trust’s breach of its own contract. This effort is in
direct contradiction to the principle that a party to a contract cannot tortiously
interfere with that contract. Subjecting a contracting party to interference liability
would convert breach of contract into a tort, which is clearly impermissible. See
Am. Int’l Land Corp. v. Hanna,
323 So. 2d 567, 569 (Fla. 1975) (“[A] breach of
contract cannot be converted into a tort merely by allegations of malice”). Tort
damages cannot be given for conduct in violation of a contract with the plaintiff
unless that conduct constitutes an independent tort. Nicholas v. Miami Burglar
Alarm Co.,
339 So. 2d 175, 178 (Fla. 1976) (“Punitive damages are not
recoverable for breach of contract, irrespective of the motive of defendant except
where the acts constituting a breach of contract also amount to a cause of action in
tort”).
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In this case, there is no independent tort for which the Trust or Mazzoni
could be held liable. The allegedly improper nature of Mazzoni’s interfering acts
is based entirely on the claim that those acts violated the Trust’s contractual
obligations to M&M. Mazzoni allegedly refused to sign approval documents for
M&M’s permits, removed “for lease” signs from the property, and told people that
the sale would never close, but none of these actions were criminal or contrary to
any non-contractual right of M&M. Indeed, M&M could not even prove that the
Trust breached its contract by these actions. Imposing tortious interference
liability on Mazzoni, therefore, would be even more illogical than holding a breach
of contract tortious—it would hold actions tortious that did not even amount to a
breach.
III.
For the foregoing reasons, we agree with the decision of the district court
granting summary judgment in favor of William Mazzoni and the Mazzoni Trust.
If the result seems formalistic, that is only because the court is bound to give effect
to the corporate forms through which the plaintiff and its privies chose to contract.
The judgment is, therefore,
AFFIRMED.
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