STEPHEN HESS v. PMG-S2 SUNNY ISLES, LLC

Third District Court of Appeal
State of Florida
Opinion filed August 10, 2022.
Not final until disposition of timely filed motion for rehearing.
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No. 3D20-630
Lower Tribunal No. 18-37446
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Stephen Hess, et al.,
Appellants,
vs.
PMG-S2 Sunny Isles, LLC,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, William
Thomas, Judge.
Quintana Law Firm, and J. Luis Quintana; Schlesinger Law Group, and
Michael J. Schlesinger; Shutts & Bowen LLP, and Julissa Rodriguez, for
appellants.
Kluger, Kaplan, Silverman, Katzen & Levine, P.L., Josh M. Rubens and
Philippe Lieberman; Samson Appellate Law, and Daniel M. Samson, for
appellee.
Before FERNANDEZ, C.J., and SCALES and GORDO, JJ.
GORDO, J.
Stephen Hess, Clearwater Beach Company, LLC, Muse 1901, LLC,
Muse 2101, LLC and Muse 2201, LLC appeal a final judgment in favor of
PMG-S2 Sunny Isles, LLC. We have jurisdiction. Fla. R. App. P.
9.030(c)(1)(A). We affirm the trial court’s order awarding summary judgment
in PMG’s favor in all regards. We find, however, the trial court erred in not
allowing Hess to amend his pleadings regarding calculation of the return of
the deposits and therefore remand with instructions to allow amendment.
FACTUAL AND PROCEDURAL BACKGROUND
In 2014, Stephen Hess visited Muse, a condominium located in Miami-
Dade being developed by PMG, where he reviewed promotional materials
and floor plans for prospective units. Hess, and his company Clearwater,
subsequently entered into purchase agreements with PMG for the purchase
and sale of three pre-construction condominium units at Muse. Hess paid
PMG $6.1 million in deposits for the units.
The terms of the agreements barred assignment and amendment
without the consent of PMG and a signed written instrument. Per the
agreements, if Hess and Clearwater defaulted, PMG was entitled to
terminate the agreements and apply a specific damages clause to calculate
PMG’s damages. Four subsequent amendments to the agreements were
made, and three were sent to Hess and Clearwater. In the first, PMG agreed
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Hess could assign its interest in the agreements to an affiliated domestic
corporate entity. The second detailed modifications regarding an institutional
mortgagee. The third only affected future purchasers and was not sent to
Hess or Clearwater and the fourth detailed changes to the property
management agreement and reflected the unit’s final square footage.
Neither Hess nor Clearwater sent any written notice to rescind the
agreements due to these amendments.
In May 2018, Hess and Clearwater assigned their “rights, title, interests
and obligations” under the agreements to Muse 1901, Muse 2101 and Muse
2201 (the “Muse entities”). Notice of the assignments were sent to PMG.
Closing was scheduled for May 31, 2018, but the Muse entities failed to
timely close. In late June, PMG furnished the Muse entities with formal
written notice of default and terminated the agreements.
In November 2018, Hess and Clearwater filed a complaint against
PMG for recission pursuant to sections 718.202 and 718.506, Florida
Statutes, breach of contract and declaratory judgment challenging the
enforceability of the default damages clause in the agreements. Following a
motion by PMG, the trial court dismissed the declaratory judgment action
without prejudice as the issue was not ripe because the units had not been
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resold.1 Hess and Clearwater then filed an amended complaint, including
the Muse entities as co-plaintiffs and reasserting the claims for recission and
breach of contract only. After initial discovery was conducted, both Hess and
PMG filed motions for summary judgment.
In March 2020, rather than proceeding to trial, the trial court heard
argument in support of the cross-motions and granted PMG’s motion for
summary judgment finding Hess and Clearwater lacked standing and the
remaining claims were unsupported. Hess subsequently filed a motion for
reconsideration of the entry of summary judgment and requested to amend
his complaint to reassert his previous claim regarding the calculation of the
1
In granting the motion to dismiss the trial court stated:
THE COURT: What about the fact that it’s
premature? We’re not even there yet. And why
should I, in this instance, give you an advisory
opinion of how I think it should go assuming that
you’re not fully compensated pursuant to the
contract?
...
Why don’t we make that determination if we
determine that there is a breach? In other words, we
can litigate the case based upon the other three
allegations in the complaint. If the Court finds that
there is a breach, then we can litigate the issue of
whether or not when the breach occurred and
what damages you are entitled to.
(emphasis added).
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deposits because he learned the issue had recently ripened as PMG resold
at least one of the units. The trial court subsequently denied Hess’s motion
for rehearing and motion to amend, entering final judgment in PMG’s favor.
This appeal followed.
LEGAL ANALYSIS
We review the entry of summary judgment de novo. See Volusia Cnty.
v. Aberdeen at Ormand Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). 2 We
review for abuse of discretion a trial court’s denial of leave to amend a
pleading. See Jain v. Buchanan Ingersoll & Rooney PC, 322 So. 3d 1201,
1204 (Fla. 3d DCA 2021), reh’g denied (July 27, 2021). We affirm without
further discussion the trial court’s ruling that PMG was properly entitled to
summary judgment as a matter of law on the issues raised. We reverse,
however, as Hess should have been allowed to amend his pleadings.
Florida Rule of Civil Procedure 1.190(a) requires courts to allow
amendment of pleadings which “shall be given freely when justice so
requires.” This Court has considered some exceptions to this rule, such as
abuse of the privilege to amend, futility of the proposed amendment and
2
“Where the trial court has adjudicated the summary judgment motion prior
to the new rule’s May 1, 2021, effective date (as the trial court did in this
case), we apply the pre-amendment rule in our review on appeal.” De Los
Angeles v. Winn-Dixie Stores, Inc., 326 So. 3d 811, 813 (Fla. 3d DCA 2021).
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prejudice to the opposing party. See Grove Isle Ass’n, Inc. v. Grove Isle
Assocs., LLLP, 137 So. 3d 1081, 1090 (Fla. 3d DCA 2014) (“A trial court
should give leave to amend a deficient complaint unless . . . the complaint
shows on its face that there is a deficiency which cannot be cured by
amendment.” (quoting Unitech Corp. v. Atl. Nat’l Bank of Miami, 472 So. 2d
817, 818 (Fla. 3d DCA 1985))); Annex Indus. Park, LLC v. City of Hialeah,
218 So. 3d 452, 453 (Fla. 3d DCA 2017) (“‘Leave to amend should not be
denied unless the privilege has been abused or the complaint is clearly not
amendable.’” (quoting Osborne v. Delta Maint. and Welding, Inc., 365 So. 2d
425, 427 (Fla. 2d DCA 1978))); Carib Ocean Shipping, Inc. v. Armas, 854
So. 2d 234, 236 (Fla. 3d DCA 2003) (noting “amendments may be denied
when there is a sufficient showing of prejudice to the opposing party”); Vella
v. Salaues, 290 So. 3d 946, 949 (Fla. 3d DCA 2019) (“‘[W]hile the policy in
Florida is to liberally allow amendments to pleadings where justice so
requires, a trial judge in the exercise of sound discretion may deny further
amendments [where the same materially varies from the relief initially
sought, or] where a case has progressed to a point that the liberality
ordinarily to be indulged has diminished.’” (quoting Alvarez v. DeAguirre, 395
So. 2d 213, 216 (Fla. 3d DCA 1981))).
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Importantly, in Jain we found the trial court did not abuse its discretion
in denying a plaintiff’s motion to amend her pleadings after summary
judgment was entered in the defendant’s favor where the plaintiff conceded
“in her brief that she only sought leave to amend because she saw the
‘handwriting on the wall’” and the “proposed amendment would advance new
issues that contradict her prior unsuccessful theories.” Jain, 322 So. 3d at
1206. This Court determined “[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.” Id.
Here, Hess moved to amend his pleadings after the entry of summary
judgment, but the purpose of his amendment was not to advance a new issue
or otherwise undermine the trial court’s summary judgment liability
determination. Rather, the amendment sought to have the deposits
distributed consistent with the terms of the default provision following the trial
court determination the purchase agreements were not rescinded. Hess’s
motion to amend was consistent with the trial court position at the hearing on
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the motion to dismiss, which stated entitlement to the deposits should be
litigated after the issue of breach was determined. 3
Under the specific facts of this case, where Hess filed his initial
complaint seeking a judicial determination of the disposition of the deposits,
the trial court dismissed the count as premature as the application of the
default provisions was uncertain and events transpired during the pendency
of the action rendering the default provisions ripe for enforcement, we
conclude it was error not to allow amendment.
Affirmed in part, reversed in part, and remanded with instructions.
3
We note at oral argument Counsel for PMG contended all $6.1 million of
Hess’s deposits were necessarily forfeited because any arguments
regarding their return would be barred under the doctrine of res judicata. We
express no opinion as to this res judicata argument as it was not before us
and to do so would be advisory. The interests of justice, however, are
necessarily implicated here where a party argued all terms of a purchase
agreement are enforceable, but now seeks to evade the impact of some
provisions and obtain a windfall. Given that “any doubts should be resolved
in favor of the amendment,” Hess should have been granted leave to amend
his complaint. Overnight Success Const., Inc. v. Pavarini Const. Co., Inc.,
955 So. 2d 658, 659 (Fla. 3d DCA 2007).
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