Energy Smart Industry, LLC v. Morning Views Hotels - Beverly Hills, LLC

Case: 15-13937 Date Filed: 09/08/2016 Page: 1 of 11
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 15-13937
Non-Argument Calendar
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D.C. Docket No. 1:14-cv-23284-AOR
ENERGY SMART INDUSTRY, LLC,
Plaintiff - Counter Defendant - Appellant,
versus
MORNING VIEWS HOTELS-BEVERLY HILLS, LLC,
Defendant - Counter Claimant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
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(September 8, 2016))
Before TJOFLAT, WILSON, and JILL PRYOR, Circuit Judges.
PER CURIAM:
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Plaintiff-Appellant Energy Smart Industry, LLC appeals the district court’s
denial of leave to amend its complaint and award of summary judgment to
Defendant-Appellee Morning View Hotels–Beverly Hills, LLC on Energy Smart’s
claims for breach of contract, unjust enrichment, and quantum meruit. After
thorough review of the record and consideration of the parties’ briefs, we affirm.
I
The undisputed facts are as follows. Energy Smart and Morning View
entered into a valid contract (the LED Lighting Retrofit Agreement) under which
Energy Smart agreed to retrofit Morning View’s hotel with energy-efficient
lightbulbs. The relevant provisions of the LED Lighting Retrofit Agreement read
as follows:
1. CONTRACT DOCUMENTS: The contract
documents shall consist of this Agreement, all exhibits
attached hereto, any lighting design drawings and
specifications and any other documents that are
specifically incorporated herein by reference
(collectively, the Contract Documents). The terms of the
Agreement include Exhibits hereto, which are
incorporated as part of this Agreement by this reference.
2. SCOPE OF WORK: The Agreement shall be
construed in accordance with the IESNA lighting design
guide, whereby ESI will perform a partial or full lighting
retrofit of the Project. Client will therefore provide to
ESI full access to the Project. ESI’s Work shall consist
of the tasks enumerated in the Contract Documents
together with such ancillary tasks and services which are
reasonably inferable there from. . . .
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3. CONTRACT PRICE: Client agrees to pay ESI, a fee
for all services and installed property that are the subject
of this Agreement, as specified hereafter in Exhibit A.
The Client has chosen the 60/40 program where as they
will keep 40% of the savings delivered by the lighting
retrofit and pay ESI 60% of the savings from the Energy,
Maintenance, federal Tax and Utility rebates generated
from this project. The annual electric saving for this
Lighting project is $49,493, the amounts [sic] is pursuant
to said Exhibit A. The KW/H cost for calculation of the
saving is $0.12. ESI, payment is annually $44,233.00, in
Monthly installments of $3,686.00 per month for 60
months (5 years). In consideration for the performance
of the Work, Client shall pay ESI an amount equal to
$3,686.00 per month, each such payment to ESI being
payable on the first (1st) day of each month during the 60
months (5) year term of this Agreement following the
completion of the Work (hereinafter each such payment
called a “Savings Payment”) . . . ; provided that such
amounts due ESI may be prepaid in whole or in part
without premium or penalty but also without discount or
reduction of any kind. . . .
....
6. CHANGE ORDERS: Any change involving either an
increase or decrease in the Savings Payment or the
Contract Time may be accomplished only by a written
agreement executed by both parties.
....
26. JURISDICTION: Venue and jurisdiction for any
interpretations or enforcement of this Agreement shall be
in Courts of the State of Florida located in Miami-Dade
County, Florida. This Agreement shall be construed and
enforced in accordance with Florida law.
Exhibit A identifies, inter alia, several areas within the hotel (e.g., lobby), the type
of fixture(s) in each area, the pre-installation maintenance cost of those areas each
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year, and a description of the LED lightbulbs intended to replace the current
lightbulbs in each area. Exhibit A also states that the “KWH cost lighting” is
$0.12, and the annual “savings” anticipated, excluding maintenance savings, will
be $49,493.70. Separately, Exhibit C lists “Mr. C of Beverly Hills (Morning View
Hotels-BH, LLC), 1224 Beverwil Drive, Los Angeles, CA 90035” as the property
to be retrofitted.
It is also undisputed that the parties agreed to divide the project into five
phases. After Energy Smart completed Phase One of the project, it requested
payment for the work completed. When Morning Star did not pay, Energy Smart
stopped work, deemed Morning Star to be in default, and filed suit for breach of
contract, unjust enrichment, and quantum meruit. Energy Smart did not complete
any other phase of the project.
Morning View removed the case to federal court and filed a counterclaim for
breach of contract. On November 6, 2014, the district court issued a Trial Order,
which, in relevant part, set a December 5, 2014, deadline for adding parties or
amending pleadings; an April 10, 2015, deadline to complete discovery; and a May
1, 2015, deadline to submit any remaining motions in limine directed to trial
evidence. On May 7, 2015, Energy Smart filed a motion to amend its complaint
and affirmative defenses. Subsequently, on cross-motions for summary judgment
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on Energy Smart’s claims, the district court entered judgment for Morning Star.
Energy Smart filed this timely appeal.
II
We review a grant or denial of summary judgment de novo. Fla. Evergreen
Foliage v. E.I. Dupont de Nemours & Co., 470 F.3d 1036, 1040 (11th Cir. 2006)
(per curiam). We review for an abuse of discretion the district court’s denial of
leave to amend a complaint. Id.III
The gravamen of the parties’ dispute is whether Energy Smart could seek
payment at the time it completed each phase of the project, rather than upon
completion of all phases of the project. The district court determined that,
“because the contract defines ‘the Work’ as ‘the tasks enumerated in the Contract
Documents together with such ancillary tasks and services which are reasonably
inferable there from,’ the ‘Work’ includes all five phases of the project.” Energy
Smart Indus., LLC v. Morning View Hotels-Beverly Hills, LLC, 112 F. Supp. 3d
1330, 1335 (S.D. Fla. 2015). Additionally, “while Morning View was to make
monthly payments of $3,686.00 for a period of five years, the five-year period was
to begin ‘following the completion of the Work.’” Id. (quoting the LED Lighting
Retrofit Agreement). Thus, the district court concluded, because Energy Smart
had not completed all five phases, Morning Star’s contractual obligation to pay the
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agreed upon amount within a five-year period had not been triggered. See id.Moreover, although Energy Smart claimed the LED Lighting Retrofit Agreement
had been modified to allow for a different payment schedule, the district court
found that Energy Smart had not presented “clear and unequivocal evidence of a
mutual agreement” reflecting that change, such that it would work a fraud on
Energy Smart not to enforce it, as required by Florida law. See id. at 1336–37.
On appeal, Energy Smart argues that the district court’s interpretation of the
word “Work” in the LED Lighting Retrofit Agreement was unreasonable because
(a) there is no evidence on the face of the contract whether the project was a full or
partial lighting retrofit of the entire hotel, and (b) the parties’ oral agreements and
subsequent conduct constituted enforceable modifications to the payment schedule.
Additionally, Energy Smart seeks review of the district court’s decision to deny
Energy Smart leave to amend its complaint, on grounds that leave should have
been given because the amendments would have allowed Energy Smart to make a
proper showing that the LED Lighting Retrofit Agreement was modified. We
address each issue in turn.
A
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Under Florida law, a breach of contract arises when there exists (1) “a valid
contract”; (2) “a material breach” of that contract; and (3) resulting “damages.”1
Beck v. Lazard Freres & Co., LLC, 175 F.3d 913, 914 (11th Cir. 1999) (per
curiam). To determine whether a breach occurred, we look to the obligations of
each party under the contract. In Florida, “the actual language used in the contract
is the best evidence of the intent of the parties and, thus, the plain meaning of that
language controls.” Rose v. M/V “Gulf Stream Falcon”, 186 F.3d 1345, 1350
(11th Cir. 1999). Although a contract may contain an express provision that all
modifications must be in writing, Florida law permits enforcement of oral
modifications where there is “clear and unequivocal evidence of a mutual
agreement,” Fid. & Deposit Co. of Md. v. Tom Murphy Constr. Co., 674 F.2d 880,
885 (11th Cir. 1982), that “has been accepted and acted upon by the parties in such
a manner as would work a fraud on either party to refuse to enforce it,” Prof’l Ins.
Corp. v. Cahill, 90 So. 2d 916, 918 (Fla. 1956). A plaintiff only meets this
standard if she has made a showing
(a) that the parties agreed upon and accepted the oral
modification (i.e., mutual assent); and (b) that both
parties (or at least the party seeking to enforce the
amendment) performed consistent with the terms of the
alleged oral modification (not merely consistent with
their obligations under the original contract); and (c) that
due to plaintiff’s performance under the contract as
1
For the reasons stated in the district court’s opinion, we conclude Florida law governs this
contract. See Energy Smart Indus., 112 F. Supp. 3d at 1334.
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amended the defendant received and accepted a benefit
that it otherwise was not entitled to under the original
contract (i.e., independent consideration).
Okeechobee Resorts, L.L.C. v. E Z Cash Pawn, Inc., 145 So. 3d 989, 995 (Fla.
Dist. Ct. App. 2014). Absent such a showing, the plain language of the contract
controls.
Here, a plain reading of the LED Lighting Retrofit Agreement leads us to the
same construction of the contract as the district court reached. The parties
contracted for Energy Smart to retrofit, in some manner, those areas of Morning
View’s hotel that are listed in Exhibit A. The contract clearly states: “ESI’s Work
shall consist of the tasks enumerated in the Contract Documents together with such
ancillary tasks and services which are reasonably inferable there from. . . .
[Morning View] agrees to pay ESI, a fee for all services and installed property that
are the subject of this Agreement, as specified hereafter in Exhibit A.” Whether
Energy Smart was to partially or fully retrofit each area listed in Exhibit A appears
to be governed by the IESNA lighting design guide, which is not part of the record.
But, even if Energy Smart was only obligated to partially retrofit the hotel,
partially performing the partial retrofit would still fall short of completing the
Work owed under the contract. It is undisputed that Energy Smart only completed
Phase One. The LED Lighting Retrofit Agreement directly ties payment to the
completion of the Work: Morning View “shall pay [Energy Smart] an amount
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equal to $3,686.00 per month . . . during the 60 months (5) year term of this
Agreement following the completion of the Work.” Thus, Morning View did not
breach its obligation by declining to pay Energy Smart following completion of
one portion of the Work.
We are not persuaded that the LED Lighting Retrofit Agreement was
modified by the parties’ conduct, such that the plain language should not control.
As the district court noted, Energy Smart’s amended complaint does not allege that
the parties’ conduct modified the written contract. Cf. Okeechobee Resorts, 145
So. 3d at 995. At most, the record reflects that the parties agreed to divide the
Work owed under the contract into phases, and that Morning View made some
payments to Energy Smart ahead of the time period in which it was obligated to
pay. However, division of the overall Work owed under the contract into phases of
completion does not affect the total amount or scope of the Work owed. That
organization of the project also does not necessarily alter when the five-year
payment period should begin. And, payment ahead of schedule is consistent with
the LED Lighting Retrofit Agreement, which permits Morning View to “prepa[y]
in whole or in part without premium or penalty.” Consequently, Energy Smart has
not met its burden of showing by clear and unequivocal evidence that the parties
mutually agreed payment was due at the conclusion of each phase. See
Okeechobee Resorts, 145 So. 3d at 995; Fid. & Deposit Co., 674 F.2d at 885.
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Accordingly, the plain language of the LED Lighting Retrofit Agreement
controls. Morning View did not breach its obligations under that contract because
payment was not owed until all the Work was complete, even if the Work was
divided into phases. It follows, then, that the district court did not err in entering
summary judgment for Morning View on Energy Smart’s claim for breach of
contract.2
B
Upon review of the record, we conclude that the district court did not abuse
its discretion in denying Energy Smart leave to amend its complaint. Under Rule
15(a) of the Federal Rules of Civil Procedure, a party who wishes to amend its
complaint a second time must seek either the court’s leave to do so or the
permission of the adverse party. See Fed. R. Civ. P. 15(a)(2). Although, as a
general matter, the Rules indicate that leave to amend should be freely granted,
“where a party’s motion to amend is filed after the deadline for such motions, as
delineated in the court’s scheduling order, the party must show good cause why
leave to amend the complaint should be granted.” Smith v. Sch. Bd. of Orange
Cty., 487 F.3d 1361, 1367 (11th Cir. 2007) (per curiam); cf. Fed. R. Civ. P.
15(a)(2). Here, the record reflects that Energy Smart filed its motion for leave to
2
Because the parties agree that the LED Lighting Retrofit Agreement is a valid and
enforceable express contract, Energy Smart is foreclosed from bringing claims of quantum
meruit and unjust enrichment. See Ocean Commc’ns, Inc. v. Bubeck, 956 So. 2d 1222, 1225
(Fla. Dist. Ct. App. 2007); Energy Smart Indus., 112 F. Supp. 3d. at 1337.
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amend more than five months after the Trial Order deadline to do so, without
explanation as to why it could not meet the December 5, 2014, deadline—or even
the May 1, 2015, deadline. Therefore, Energy Smart did not make a showing of
good cause for failing to comply with the Trial Order and the district court did not
abuse its discretion in denying leave to amend. See Sosa v. Airprint Sys., Inc., 133
F.3d 1417, 1418 (11th Cir. 1998) (per curiam).
IV
For the foregoing reasons, we affirm the decision of the district court.
AFFIRMED.
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