Third District Court of Appeal
State of Florida
Opinion filed June 16, 2021.
Not final until disposition of timely filed motion for rehearing.
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No. 3D20-886
Lower Tribunal No. 17-26857
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Avra Jain,
Appellant,
vs.
Buchanan Ingersoll & Rooney PC, a foreign profit
corporation, and Richard A. Morgan, an individual,
Appellees.
An Appeal from the Circuit Court for Miami-Dade County, Michael A.
Hanzman, Judge.
Boies Schiller Flexner LLP, and Bruce A. Weil and Steven W. Davis;
Bruce S. Rogow, P.A., and Bruce S. Rogow (Cedar Mountain, NC) and Tara
A. Campion (Boca Raton), for appellant.
White & Case LLP, and Raoul G. Cantero, James N. Robinson,
Zachary B. Dickens and W. Dylan Fay, for appellees.
Before FERNANDEZ, HENDON, and BOKOR, JJ.
HENDON, J.
Avra Jain (“Jain”) appeals from a final summary judgment in favor of
Buchanan Ingersoll et al. (collectively, “Buchanan”). We affirm.
The current legal malpractice case against Buchanan arises out of a
dispute over a promissory Note and Guaranty given by Jain to Abraham
Cohen (“Cohen”). Jain seeks to recover from Buchanan the approximately
$11 million she was found to owe Cohen in the underlying case, Abraham
Cohen v. Avra Jain, 2009-14497-CA-01, affirmed on appeal, Cohen v. Jain,
219 So. 3d 100 (Fla. 3d DCA 2017).
Facts
Jain and her partner invested $5 million to acquire a 45% ownership
interest in a residential development project owned by Cohen. Through her
company, H&H Investments (“H&H”), Jain purchased all of Cohen’s
remaining ownership interest for another $5 million. Via a Purchase and
Sale Agreement, H&H made a $500,000 down payment and gave Cohen a
promissory Note in Cohen’s favor for the remainder. Jain personally
guaranteed the payment of the Note with an absolute Guaranty Agreement
(“Guaranty”) for the amount of $4.5 million, which did not require Cohen to
first institute suit or pursue or exhaust any rights or remedies against H&H
for payment.
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H&H defaulted on the loan. Cohen sued H&H on the Purchase and
Sale Agreement, and sued Jain on the Guaranty. Jain’s defense was that
despite admitting that she breached the Guaranty, she was nevertheless not
liable under the Guaranty because she was fraudulently induced into it and
because she asserted that Cohen later agreed to destroy the Note. The
Note was never presented at trial. Judge Hogan Scola granted a directed
verdict on those issues because: (1) no evidence supported her claim of
fraudulent inducement; and (2) the Guaranty itself prohibited oral
modifications. In 2016, the trial court entered final judgment against Jain and
H&H jointly and severally in the amount of $8,189.060.04.
Jain moved to vacate the final judgment on the basis that Cohen’s
failure to provide the original Note barred recovery. Buchanan’s co-counsel
from another firm argued that motion, which was denied. On appeal, this
Court affirmed. Cohen v. Jain,
219 So. 3d 100 (Fla. 3d DCA 2017).
Subsequently, through Jain’s co-counsel in the Cohen case, Jain filed
a malpractice action against Buchanan alleging that Buchanan 1) should
have objected to or moved for directed verdict on Cohen’s failure to
surrender or reestablish the Note, arguing that without the Note, Cohen could
not enforce the Guaranty (“Lost Note theory”); 2) Buchanan made several
strategic errors throughout the case (“Trial Strategy theory”). Buchanan
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moved for partial summary judgment on the Lost Note theory. The trial court
judge (Judge Butchko) heard argument on the Lost Note theory and the
parties submitted proposed orders. Judge Butchko transferred to another
division and Judge Hanztman replaced her. Two days after her transfer,
Judge Butchko issued an order denying Buchanan’s motion for partial
summary judgment on Jain’s Lost Note theory. 1
Buchanan moved for reconsideration of Judge Butchko’s grant of
partial summary judgment. Judge Hanzman granted the motion and, after
hearing arguments, granted summary judgment for Buchanan on Jain’s
second amended complaint. Prior to Judge Hanzman rendering written
rulings, Jain filed a motion requesting leave to file a third amended complaint,
which Judge Hanzman denied, and later denied Jain’s motion for
reconsideration.
Jain argues two issues on appeal. First, she argues that the trial court
erred by vacating the predecessor judge’s non-final order and granting
Buchanan’s motion for summary judgment. Second, she asserts that the trial
1
The trial court rejected Buchanan’s argument that its failure to raise the
Note's absence at trial was irrelevant because Jain would have been
independently liable on Guaranty. The judge concluded that Buchanan’s
failure to object undermined its argument that the underlying debt was
discharged where Florida law holds a guarantor is not liable under a guaranty
unless it can be proven that there is still a valid debt.
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court should have granted her motion for leave to file a third amended
complaint.
We review a grant of summary judgment de novo. Orozco v.
McCormick 105, LLC,
276 So. 3d 932, 935 (Fla. 3d DCA 2019). We review
for abuse of discretion a trial court’s denial of leave to amend a pleading.
Grove Isle Ass'n, Inc. v. Grove Isle Assocs., LLLP,
137 So. 3d 1081, 1089
(Fla. 3d DCA 2014).
Discussion
We first address whether the trial court erred by vacating the
predecessor judge’s non-final order granting partial summary judgment to
Jain, and instead granting summary judgment to Buchanan on Jain’s Lost
Note theory. We conclude it did not.
Jain argues that the successor judge should have declined to revisit
the predecessor judge’s non-final order denying Buchanan’s motion for
partial summary judgment on Jain’s Lost Note theory as a matter of “comity
and courtesy.” However, trial courts have the inherent authority to revisit
interlocutory orders at any time before final judgment. See Fratangelo v.
Olsen,
271 So. 3d 1051, 1055 (Fla. 3d DCA 2018) (noting that “prior to final
judgment, a successor judge has the power to vacate or modify a
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predecessor’s interlocutory rulings”); Rokosz v. Haccoun,
274 So. 3d 498,
500 (Fla. 3d DCA 2019).
Substantively, the successor judge recognized that Buchanan’s
alleged failure to object to Cohen’s failure to supply the original Note did not
proximately result in the judgment against Jain because Cohen had sued her
on the Guaranty, which was an independent contract and not a negotiable
instrument. The law in Florida provides that one who undertakes an absolute
guarantee of payment by another becomes liable immediately upon default.
Anderson v. Trade Winds Enters. Corp.,
241 So. 2d 174, 177 (Fla. 4th DCA
1970). Where the guaranty is absolute, the guarantor becomes liable upon
non-payment by the principal, and the person in whose favor the guaranty
runs has no duty to first pursue the principal before resorting to the
guarantors.
Id. If a written contract in unambiguous terms expresses an
unconditional guarantee, then the guaranty is absolute, and the guarantor's
liability cannot be limited or qualified by parol evidence as to a prior or
contemporary understanding. See Bryant v. Food Mach. And Chem. Corp.
Niagara Chem. Division,
130 So. 2d 132 (Fla. 3d DCA 1961). This leads to
the conclusion that the Note was not required to support enforcement of the
Guaranty. See von Dunser v. Se. First Nat’l. Bank of Miami,
367 So. 2d
1094, 1096 (Fla. 3d DCA 1979) (holding as a well-established principle that
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under an absolute and unconditional contract of guaranty, it is no defense
that the creditor has lost the security interest).
Further, the language of the written Guaranty agreement is not legally
ambiguous and, as a matter of law, creates an absolute guaranty of
payment, as provided in relevant part:
The Guaranty Agreement is a guaranty of payment and not a
guaranty of collection. It shall not be necessary for [Cohen], in
order to enforce such payment by [Jain], to first institute suit or
pursue or exhaust any rights or remedies against [H-H].
See Agarwal v. Pinnacle Realty Mgmt. Co.,
718 So. 2d 947, 948 (Fla. 5th
DCA 1998) (holding that the guaranty was absolute and the grantor was not
required to pursue other potential defendants first before enforcing its claim
against the guarantor).
The trial court correctly noted that the predecessor judge’s legal
analysis was incorrect and concluded that the Guaranty is not a negotiable
instrument, it was enforceable even in the absence of the Note, and Jain
admitted to the debt owed. Thus, Buchanan’s alleged malpractice did not
proximately cause Jain’s injury. See also Nat. Answers, Inc. v. Carlton
Fields, P.A.,
20 So. 3d 884, 888 (Fla. 3d DCA 2009) (affirming the trial court’s
finding that the undisputed facts entitled both law firms to judgment in the
litigation malpractice claims as a matter of law, as neither firm's conduct
could have proximately caused the loss to the plaintiff, citing Silvestrone v.
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Edell,
721 So. 2d 1173, 1175 (Fla.1998) (holding that liability for litigation
malpractice requires that the attorney be the proximate cause of the client's
loss)).
Additionally, the Note issue has already been litigated and determined
against Jain in the consolidated appeals of Jain v. Cohen, 3D16-1297 and
Cohen v. Jain, 3D16-281, in which this Court held,
[W]e find that the trial court did not err in its evidentiary rulings
excluding certain evidence and, to the extent that any evidence
was erroneously excluded, such error was harmless. See
Special v. West Boca Med. Ctr.,
160 So. 3d 1251 (Fla. 2014)
(applying harmless error standard in a civil appeal, requiring the
beneficiary of the error to establish that there is no reasonable
probability that the error contributed to the verdict). We also hold
that the trial court properly denied Jain and Murphy's motion for
directed verdict and properly granted Cohen's motion for directed
verdict on Jain and Murphy's affirmative defenses and
counterclaims. See Sanders v. ERP Operating Ltd. P'ship,
157
So. 3d 273, 277 (Fla. 2015) (holding that an appellate court,
viewing the evidence and all inferences of fact in light most
favorable to non-moving party, can affirm a directed verdict only
where no proper view of the evidence could sustain a verdict in
favor of the non-moving party); Tylinski v. Klein Auto., Inc.,
90
So. 3d 870, 873 (Fla. 3d DCA 2012) (recognizing that “a motion
for directed verdict should be granted when there is no
reasonable evidence upon which a jury could legally predicate a
verdict in favor of the non-moving party.”).
Finally, we cannot say that the trial court abused its discretion in
denying Jain and Murphy's motion for relief from judgment under
rule 1.540. See LPP Mortg. Ltd. v. Bank of America, N.A.,
826
So. 2d 462, 463–64 (Fla. 3d DCA 2002) (applying gross abuse
of discretion standard in reviewing trial court's ruling on a motion
for relief from judgment under rule 1.540 and quoting Schwab &
Co. v. Breezy Bay, Inc.,
360 So. 2d 117, 118 (Fla. 3d DCA 1978)
(“The discretion reposed in the trial judge by Fla. R. Civ. P. 1.540
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is of the broadest scope and in order to reverse a judge's ruling
thereunder, there must be a showing of a gross abuse of
discretion.”))
Cohen, 219 So. 3d at 100 (emphasis added). Jain and H-H have already
unsuccessfully litigated the matter of Cohen’s failure to present the Note via
the Rule 1.540 motion referenced above.
Additionally, Jain’s unsuccessful appeal of this issue in the Cohen
litigation bars litigation of the same issue as against Buchanan, as Buchanan
can be considered in privity with Jain when it represented her in the Cohen
case. The well-established rule in Florida that collateral estoppel may be
asserted only when the identical issue has been litigated between the same
parties or their privies. Stogniew v. McQueen,
638 So. 2d 114, 115 (Fla. 2d
DCA 1994), approved,
656 So. 2d 917 (Fla. 1995). To be in privity with a
party to the prior litigation, “one must have an interest in the action such that
she will be bound by the final judgment as if she were a party.” Stogniew,
656 So. 2d at 920; O'Brien v. Fed. Tr. Bank, F.S.B.,
727 So. 2d 296, 298
(Fla. 5th DCA 1999).
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Finally, we address whether the court abused its discretion by denying
Jain’s motion to amend the complaint a third time after the court already had
orally granted summary judgment. 2 We conclude it did not.
A court may deny leave to amend when there is prejudice to a party,
the amendment would be futile, or the privilege to amend has been abused.
See Vella v. Salaues,
290 So. 3d 946, 949 (Fla. 3d DCA 2019). A trial judge
in his or her discretion may deny further amendments where the
amendments materially vary from the relief initially sought, or where “a case
has progressed to a point that the liberality ordinarily to be indulged has
diminished.’” Vella, 290 So. 3d at 949 (quoting Alvarez v. DeAguirre,
395 So.
2d 213, 216 (Fla. 3d DCA 1981)).
Jain concedes in her brief that she only sought leave to amend
because she saw the “handwriting on the wall” after Judge Hanzman orally
granted summary judgment. Courts have generally condemned such a
practice. See Inman v. Club on Sailboat Key, Inc.,
342 So. 2d 1069, 1070
(Fla. 3d DCA 1977) (affirming an order denying leave to amend where
“Appellant was attempting to raise new issues for the first time in her motion
2
Jain sought to amend: (1) nearly nine months after Buchanan filed the
Guaranty Motion; (2) six months after the first hearing on that motion; (3) two
months after Judge Butchko ruled on that motion; (4) over a month after
Buchanan moved for reconsideration; and (5) after Judge Hanzman orally
ruled that he was entering summary judgment.
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for rehearing and for leave to amend; and summary judgment already having
been entered.”). Jain’s proposed amendment would advance new issues
that contradict her prior unsuccessful theories. Thus, “in addition to the
desirability of allowing amendments to pleadings so that cases may be
concluded on their merits, there is an equally compelling obligation on the
court to see to it that the end of all litigation be finally reached.” Vella, 290
So. 3d at 949 (citing Price v. Morgan,
436 So. 2d 1116, 1122 (Fla. 5th DCA
1983); see also Toscano Condo. Ass’n v. DDA Eng’rs, P.A.,
274 So. 3d 487,
489 (Fla. 3d DCA 2019) (affirming an order denying leave to amend where
the plaintiff did not seek leave to amend “until more than two years after the
filing of the complaint and more than six months after the trial court
conducted its case management conference”). 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. Inman,
342 So. 2d at 1070 (citing Home Loan
Co. Inc. of Boston v. Sloane Company of Sarasota,
240 So. 2d 526 (Fla. 2d
DCA 1970)); MAWI Corp. v. Advance Mortg. Corp.,
353 So. 2d 564, 565 (Fla.
3d DCA 1977).
Affirmed.
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