Verandah Development, LLC v. Gualtieri

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
VERANDAH DEVELOPMENT, LLC, )
)
Appellant, )
)
v. ) Case No. 2D15-2250
)
VINCENT GUALTIERI and BETH )
GUALTIERI, )
)
Appellees. )
___________________________________ )
Opinion filed February 17, 2016.
Appeal from the Circuit Court for Lee
County; Michael T. McHugh, Judge.
Theodore L. Tripp, Jr., and Justin B.
Mazzara of Hahn, Loeser, & Parks, LLP,
Fort Myers, for Appellant.
Kelsey L. Hazzard and William J. Hazzard
of Coleman, Hazzard, & Taylor, P.A.,
Naples, for Appellees.
CASE, JAMES R., Associate Senior Judge.
Verandah Development, LLC, appeals the final judgment entered in favor
of Vincent and Beth Gualtieri. We affirm the trial court's finding that Verandah was not
entitled to amend the refund policy under its agreement with the Gualtieris. However,
we reverse the final judgment because the Gualtieris did not establish that they were
entitled to an immediate refund.
I. Background
In January 2006, the Gualtieris applied to join the golf club owned by
Verandah Development, LLC, in the residential development where they resided. When
they applied they signed and submitted a Membership Agreement. Under the terms of
the Agreement, Verandah had the absolute discretion to accept or reject the Gualtieris
as members. Paragraph two of the Agreement provided in pertinent part:
My membership privileges will be subject to the terms and
conditions of the Club Membership Plan and Rules and
Regulations, which I acknowledge receipt of (the
"Membership Plan"). I hereby acknowledge that my
membership in the Club is not an investment in the Club, nor
does it provide an equity or ownership interest in the Club or
the Club Facilities, which are owned solely by [Verandah].
Membership in the Club does not confer upon me a vested
or prescriptive right or easement to use the Club Facilities.
[Verandah] and the Club reserve the right, in their sole and
absolute discretion, to restrict or to otherwise reserve the
Club Facilities for maintenance, tournament play and other
special events from time to time.
Paragraph seven further provided:
I hereby acknowledge receipt of Verandah Club Membership
Plan and the Rules and Regulations and agree to be bound
by the terms and conditions thereof as the same may be
amended from time to time by the Club or [Verandah] and
irrevocably agree to fully substitute the membership
privileges acquired pursuant to the Club Membership Plan
and Rules and Regulations for any present or prior rights in
or to use of the Club Facilities.
The Gualtieris were required to submit a $40,000 deposit with their
application. Had the Gualtieris' application been rejected, the deposit would be
immediately refunded. However, because they were accepted as members, their
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deposit was refundable under Verandah's refund policy for resigned members. The
Agreement provided:
Members who join the club after 180 days of the date of their
real estate contract and later resign their membership will be
refunded their initiation deposit previously paid subject to a
"one in, one out" refund policy. Under the refund policy, the
resigned membership will be placed on a resigned waiting
list for that membership category. The Club will pay a refund
of the initiation deposit to the first person on the resigned list
upon every sale of a membership category.1
In 2006, when the Gualtieris joined the Club, the Membership Plan contained a similar
refund policy.2 In 2009, Verandah amended the Membership Plan to provide that the
Club would issue refunds to one resigned member for every three new memberships
issued in a given category. The Club issued an email notifying its members of the
amendment after it became effective. It is undisputed that the Gualtieris did not lodge
an objection to the policy at the time it was implemented. In 2014, the Gualtieris
resigned their membership. After Verandah informed the Gualtieris that they would be
refunded under the amended "three in, one out" policy they filed suit, seeking a refund
of their deposit. Verandah has been issuing refunds under the amended policy during
the pendency of this litigation.
1
The Agreement also provided that "[m]embers who joined the club within
180 days of the date of their real estate contract and later resign[ed] their membership
will be refunded their initiation deposit previously paid within 30 days after resignation,
without having to be placed on any waiting list to receive their refund ('instant
refundability')." The parties are in agreement that the Gualtieris joined the club more
than 180 days of the date of their real estate contract.
2
The Membership Plan provided that refunds would be issued to resigned
members on a "two in, one out" basis unless that category of membership was at full
capacity, in which case, Memberships would be issued on a "one in, one out" basis.
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The parties filed dueling motions for summary judgment. The Gualtieris
argued that the amended refund policy constituted a breach of Agreement. Verandah's
motion argued that under the Agreement, it was authorized to unilaterally amend the
refund policy. The trial court entered a summary final judgment in favor of the
Gualtieris, ordering that Verandah immediately pay $40,000 to them.3
II. Analysis
Verandah raises a number of issues on appeal, but we write to address
two of them.4 Verandah argues that the trial court erred in granting summary judgment
to the Gualtieris because Verandah expressly reserved the right to amend the
Membership Plan, including the refund policy. It also argued that the trial court erred in
granting summary judgment in favor of the Gualtieris because they did not establish that
they were entitled to an immediate payment of the $40,000 membership deposit. We
disagree that Verandah was authorized under the Agreement to amend the refund
policy. However, we reverse because there is no record evidence establishing that the
Gualtieris were entitled to an immediate refund.
The trial court's interpretation of a contract is a matter of law subject to de
novo review. Syvrud v. Today Real Estate, Inc., 858 So. 2d 1125, 1129 (Fla. 2d DCA
2003). We also apply a de novo review to the trial court's decision to grant summary
judgment. Id. "It is a generally accepted rule of contract law that, where a writing
expressly refers to and sufficiently describes another document, that other document, or
3
Verandah also filed a counterclaim on which the trial court granted
summary judgment in favor of the Gualtieris.
4
We find no merit in the remaining issues raised by Verandah and decline
to comment further on them.
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so much of it as is referred to, is to be interpreted as part of the writing." Avatar Props.,
Inc. v. Greetham, 27 So. 3d 764, 766 (Fla. 2d DCA 2010) (quoting OBS Co. v. Pace
Constr. Corp., 558 So. 2d 404, 406 (Fla. 1990)). In interpreting the Membership
Agreement and Membership Plan, we first turn to the plain language to discern the
parties' intent. See Hatadis v. Achieva Credit Union, 159 So. 3d 256, 259 (Fla. 2d DCA
2015). "The goal in construing the contract language is to reach a reasonable
interpretation of the entire agreement in order to accomplish its stated purpose and
meaning." Id. "[W]here one interpretation of a contract would be absurd and another
would be consistent with reason and probability, the contract should be interpreted in
the rational manner." Id. (quoting BKD Twenty-One Mgmt. Co. v. Delsordo, 127 So. 3d
527, 530 (Fla. 4th DCA 2012)).
A. Verandah was not authorized to amend the refund provision in the
Membership Agreement.
Verandah relies on paragraph seven of the Membership Agreement in
arguing that the contract authorized it to amend the refund policy. That paragraph
provides in pertinent part that the Gualtieris agreed
to be bound by the terms and conditions [of the Membership
Plan and Rules and Regulations] as the same may be
amended from time to time by the Club or [Verandah] and
irrevocably agree to fully substitute the membership
privileges acquired pursuant to the Club Membership Plan
and Rules and Regulations for any present or prior rights in
or to use of the Club Facilities.
(Emphasis added.) Verandah also argues that under the Agreement, the Gualtieris had
no vested rights whatsoever. It relies on the following provision from the Membership
Agreement:
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Membership in the Club does not confer upon me a vested
or prescriptive right or easement to use the Club Facilities.
[Verandah] and the Club reserve the right, in their sole and
absolute discretion, to restrict or to otherwise reserve the
Club Facilities for maintenance, tournament play and other
special events from time to time.
(Emphasis added.)
We reject these arguments and are persuaded by the reasoning in
Feldkamp v. Long Bay Partners, LLC, 773 F. Supp. 2d 1273, 1282 (M.D. Fla. 2011). In
Feldkamp, a golf club suspended its refund policy and the plaintiff members filed suit
seeking a refund of their deposit. The golf club in that case had a similar arrangement
to Verandah's club—potential members submitted a membership application and
deposit. The membership application provided that members agreed to be bound by
the Membership Plan and the Rules and Regulations "as the same may be amended
from time to time by the Club . . . and irrevocably agree[d] to fully substitute the
membership privileges acquired pursuant to the Club Rules and Regulations for any
present or prior rights in or to use of the Club Facilities." Id. at 1281. The club, like
Verandah, argued that it was entitled to amend the refund policy under this provision.
The court rejected this argument, reasoning that the amendment rights of the club only
pertained to "membership priviliges ('rights in or to use of the Club Facilities') not the
substantive right to a refund." Id. at 1282.
Contrary to Verandah's arguments, these provisions only pertained to the
Gualtieris' rights in or to use the Club Facilities—the Gualtieris agreed to unilateral
amendments by Verandah pertaining to "any present or prior rights in or to use of the
Club Facilities" and agreed that their membership did not confer a vested right "to use
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the Club Facilities." This language did not permit Verandah to amend the refund policy
contained in the Membership Agreement. Rather, as in Feldkamp,
"[t]he only reasonable interpretation of [these] provision[s] is
that [the Club] had the unilateral right to make changes
which would affect the prior rights in or use of the Club
Facilities (e.g., changes related to membership dues, Club
operations and services, guest and family privileges, sale of
the Club, etc.). Thus, the refund obligation remained a
vested contractual right, not subject to amendment by the
Club.
Id. (footnote omitted).
Verandah argues that Feldkamp is distinguishable because the golf club in
that case attempted to fully suspend the refund policy whereas, in this case, Verandah
has simply changed its administration of issuing refunds by adopting the "three in, one
out" policy. We are unpersuaded by this argument because the severity of the golf
club's breach in Feldkamp is unrelated to the court's de novo interpretation of the
contract.
Verandah also cites Hamlet Country Club, Inc. v. Allen, 622 So. 2d 1081
(Fla. 4th DCA 1993), in support of its arguments that it was authorized to amend the
refund provision and that the Gualtieris had no vested rights under the Agreement. In
Hamlet, a golf club required a deposit from members for admission. Id. at 1082. The
club's bylaws had conflicting provisions as to whether a member could redeem their
membership certificate when they resigned from the club. Id. One provision provided
that redemption was available only if the club had at least 365 members. Id. Some
members contended that another provision allowed for redemption regardless of how
many members were in the club. Id. The club amended the bylaws to explicitly state
that redemption was only available if the club had 365 members. Id. The Fourth District
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held that the amendment was authorized because the right of redemption was governed
by and subject to the bylaws. Id. at 1083.
However, Hamlet is distinguishable from this case. In Hamlet, the
redemption rights were contained in the bylaws that were subject to amendment. The
Hamlet court relied on Orchard Ridge Country Club, Inc. v. Schrey, 470 N.E.2d 780,
783 (Ind. Ct. App. 1984), where the court found the rights at stake were "qualified from
the outset." The Hamlet court also distinguished First Florida Bank, N.A. v. Financial
Transaction Systems, Inc., 522 So. 2d 891, 892 (Fla. 2d DCA 1988), where this court
reaffirmed the well-established principle that "a corporation is prohibited from amending
its bylaws so as to impair a member's contractual right." The Hamlet court reasoned:
"We find [First Florida Bank] distinguishable because the corporation was attempting to
change contractual rights emanating from its charter by altering the bylaws. In the
present case the alleged vested rights are all contained in the bylaws which were
subject to amendment." Hamlet, 622 So. 2d at 1083. Accordingly, we find that
Verandah's amendment to the refund policy was impermissible under the Agreement.
B. Summary judgment was improper because the Gualtieris did not
establish their entitlement to an immediate refund.
While we agree with the trial court that Verandah was not authorized
under the Agreement to amend the refund policy, the record before this court does not
establish that the Gualtieris were entitled to an immediate refund of their deposit. The
only evidence in the record as to where the Gualtieris stood on the resignation list is the
affidavit of the club's general manager, Kenneth Congdon II. Mr. Congdon's affidavit
provided that the Gualtieris were twenty-ninth on the list as of March 2015.
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The Gualtieris argue that they were entitled to an immediate refund
because Verandah breached the Agreement by administering the resignation list under
the amended "three in, one out" policy as opposed to the original "one in, one out"
policy. We recognize that "[a] material breach by one party may be considered a
discharge of the other party's obligations thereunder." Nacoochee Corp. v. Pickett, 948
So. 2d 26, 30 (Fla. 1st DCA 2006). However, an immediate refund places the Gualtieris
in a better position than they would have been if the "one in, one out" policy had been
honored.
[T]he purpose of damages is to restore an injured party to
the same position that he would have been in had the other
party not breached the contract. In restoring the injured
party to the "same position," he "is not entitled to be placed,
because of that breach, in a position better than that which
he would have occupied had the contract been performed."
Lindon v. Dalton Hotel Corp., 49 So. 3d 299, 305 (Fla. 5th DCA 2010) ((citations
omitted) (quoting Madison Fund, Inc. v. Charter Co., 427 F. Supp. 597, 608 (S.D.N.Y.
1977)). The Gualtieris will not suffer damages until the point in time when they would
have been due for a refund under the original refund policy. Verandah's refund policy
amendment and communications with the Gualtieris regarding their refund are best
characterized as anticipatory repudiations. See Alvarez v. Rendon, 953 So. 2d 702,
709 (Fla. 5th DCA 2007) ("An anticipatory breach of contract occurs before the time has
come when there is a present duty to perform as the result of words or acts evincing an
intention to refuse performance in the future."). Accordingly, we reverse the judgment
insofar as it awards immediate damages to the Gualtieris and remand to the circuit court
for further proceedings to determine when the Gualtieris would be entitled to a refund.
Affirmed in part, reversed in part, and remanded.
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VILLANTI, C.J., and LaROSE, J., Concur.
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