Jilco, Inc. v. MRG of South Florida, Inc.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2014
JILCO, INC.,
Petitioner,
v.
MRG OF SOUTH FLORIDA, INC.,
Respondent.
No. 4D14-2114
[October 15, 2014]
Petitioner for writ of certiorari to the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; John B. Bowman, Judge; L.T. Case No.
07-12044 02.
Reed B. McClosky of Freedman & McClosky, P.A., Fort Lauderdale, for
petitioner.
Marc A. Silverman of Frank, Weinberg & Black, P.L., Plantation, for
respondent.
PER CURIAM.
Petitioner, Jilco, Inc. (“Jilco”), seeks certiorari review of an order
denying its motion for protective order on a request for post-settlement
discovery. We grant the petition.
Jilco subleased a commercial property to respondent, MRG of South
Florida, Inc. (“MRG”). After a dispute arose regarding the sublease, the
court ordered mediation where the parties entered into a preliminary
settlement agreement titled “Memorandum of Mediation Results.” The
memorandum included a provision stating that the “[p]arties contemplate
executing more formal documents to implement this agreement. However,
if not done, this agreement shall be enforceable by the parties/courts.”
Paragraph (a) of the agreement provided that MRG’s rent would be set
at $31,000 per month. Paragraph (b) provided that the rent would always
be $14,000 more than Jilco’s rent to the owner of the property.
A few months after the agreement was signed, Jilco learned that its rent
was being increased due to a property tax increase passed through by the
property owner. Jilco notified MRG that rent under the sublease would be
increased to $33,995.71, which was $14,000 more than Jilco’s new rent
to the owner.
MRG filed a motion to enforce settlement asking the court to enforce
paragraph (a), which set the rent amount at $31,000. Jilco argued that
the increase was consistent with paragraph (b) of the agreement.
Alternatively, MRG asked that the agreement be rescinded or voided due
to mistake or absence of a meeting of the minds.
By subpoena, MRG requested: (1) all leases and subleases relative to
the property; (2) all communications concerning documents in response to
paragraph 1 above, concerning payments due under the lease,
adjustments to amounts due under the lease as amended and/or the
reasons for adjustments under the lease as amended; (3) the entire lease
file; (4) all payments, records of payment, ledgers or bookkeeping entries,
sent by, received by, or in the possession of the property owner from any
entity or individual relative to documents responsive to paragraph 1 above;
and (5) the payment ledger pertaining to the lease since 2010.
Jilco moved for a protective order seeking to limit discovery to
information relevant to the dispute regarding the settlement. Jilco
objected that the request asked for nineteen years of payment history and
correspondence between Jilco and the property owner.
The trial court took the position that until the settlement issue was
decided, the case remained open and full discovery would be available.
Essentially, it found that there was no settlement agreement until one was
submitted and approved by the court. Jilco argues that the agreement did
not need to be approved by the court to be valid and that discovery beyond
the terms of the settlement is prohibited at this time. We agree.
“[R]eview by certiorari is appropriate when a discovery order departs
from the essential requirements of law, causing material injury to a
petitioner throughout the remainder of the proceedings below and
effectively leaving no adequate remedy on appeal.” Allstate Ins. Co. v.
Langston, 655 So. 2d 91, 94 (Fla. 1995) (citing Martin–Johnson, Inc. v.
Savage, 509 So. 2d 1097, 1099 (Fla. 1987)). The disclosure of a party’s
financial or confidential business information may cause irreparable harm
where the information is irrelevant to any pending matter. See Friedman
v. Heart Inst. of Port St. Lucie, Inc., 863 So. 2d 189, 194 (Fla. 2003) (quoting
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Straub v. Matte, 805 So. 2d 99, 100 (Fla. 4th DCA 2002)); Elsner v. E-
Commerce Coffee Club, 126 So. 3d 1261, 1263 (Fla. 4th DCA 2013).
Here, Jilco alleges that disclosure of information regarding its lease
with the property owner would be particularly harmful because MRG has
always coveted the long-term lease Jilco has with the property owner. Jilco
has allegedly taken pains to prevent MRG from cutting out Jilco and
dealing directly with the owner.
The court departed from the essential requirements of law in finding
that no agreement exists unless approved by the court. Florida Rule of
Civil Procedure 1.730 grants a trial court broad discretion to grant relief
as to settlement agreements reached through mediation. It is undisputed
that the parties reached an agreement that was reduced to writing and
signed by all of the parties as required under rule 1.730(b). A signed
mediated settlement agreement is a contract. Silver v. Silver, 992 So. 2d
886, 888 (Fla. 2d DCA 2008). “Florida courts have routinely permitted
issues of enforceability of settlements to be resolved through motions filed
in the pending litigation rather than requiring independent actions.”
Stamato v. Stamato, 818 So. 2d 662, 664 (Fla. 4th DCA 2002). The proper
course is for the court to resolve the dispute regarding the validity of the
agreement before ruling on the request for discovery. To treat the
agreement as though it did not exist, simply because it was being
challenged, would pose a great threat to mediated settlements.
As Jilco points out, where the parties enter into a settlement agreement,
the settlement bars discovery regarding settled matters no longer at issue
in the litigation. See Eagle FL VI SPE, LLC v. Cypress Creek Plaza, LLC,
128 So. 3d 950, 952 (Fla. 2d DCA 2013). An order compelling discovery
while the settlement agreement is still in effect constitutes a departure
from the essential requirements of the law. Id. at 953.
Because the challenge to the agreement is unresolved, the trial court
should first determine whether the agreement is valid and enforceable. If
so, the court should limit discovery to information on issues which survive
the terms of the settlement agreement. Presently, the court’s order
compels production of nineteen years of documents regarding Jilco’s lease
with the property owner. The court refused to limit discovery in any way
and did not make a determination that the discovery was relevant to any
issue in the case. We grant the petition for certiorari and quash the order
denying Petitioner’s motion for protective order.
Petition granted. Order quashed.
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WARNER, STEVENSON and GROSS, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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