HILLCREST COUNTRY CLUB LIMITED PARTNERSHIP v. ZYSCOVICH, INC.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
HILLCREST COUNTRY CLUB LIMITED PARTNERSHIP,
a Delaware limited partnership,
Appellant,
v.
ZYSCOVICH, INC., a Florida corporation,
Appellee.
No. 4D18-3169
[January 22, 2020]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Carlos A. Rodriguez, Judge; L.T. Case No. 12-021362
(14).
Joseph H. Lang, Jr. and Kevin P. McCoy of Carlton Fields, P.A., Tampa,
for appellant.
Richard Daniels and Ari Sweetbaum of Daniels Rodriguez Daniels
Berkeley & Cruz, P.A., Coral Gables, for appellee.
GERBER, J.
A golf course owner, which was attempting to convert the golf course
into residences, appeals from the circuit court’s final order granting an
architect’s motion for summary judgment to be paid a bonus fee for
services rendered to the owner.
The owner argues the circuit court erred in finding the bonus fee
provision in the parties’ contract had “only one reasonable interpretation”
of the conditions which had to occur for the architect to be entitled to the
bonus fee. According to the owner, the bonus fee provision’s only
reasonable interpretation was that another condition had to occur before
the architect became entitled to the bonus fee.
Thus, the owner argues, the circuit court should have denied the
architect’s motion for summary judgment, and granted the owner’s cross-
motion for summary judgment, which sought a finding that the architect
was not entitled to the bonus fee.
We conclude that the bonus fee provision was ambiguous, and that
neither the architect nor the owner was entitled to summary judgment.
Thus, we reverse and remand for a trial on the merits, during which the
parties may present parol evidence allowing the trier of fact to interpret
the bonus fee provision’s meaning.
We present this opinion in three parts:
1. The contract’s terms, including the bonus fee provision;
2. The parties’ arguments; and
3. Our review.
1. The Contract’s Terms, Including the Bonus Fee Provision
The parties’ contract was entitled “Master Plan Design and Consulting
Agreement.” The contract’s introduction provided, in pertinent part:
The Architect will develop a Master Plan for the redevelopment
and coordinate, in whole or part . . . the obtaining of the
necessary zoning and other approvals from the applicable
governmental entities and neighboring landowners,
condominium associations, and cooperatives, etc. as
appropriate.
The contract then provided that the architect was to perform its work
in three phases: (1) a programmatic phase, in which the architect was to
provide a preliminary report and pre-design analysis; (2) a master plan
preliminary design phase; and (3) a master plan final design phase. The
master plan final design phase would include “[a] professionally prepared
full color rendering . . . plus sketches and drawings of the proposed project
. . . for use in the permitting process.” (emphasis added).
The contract next provided that, for the work described above, the
architect would be paid a base fee of $250,000. The contract further
provided that services in addition to those described in the contract would
be paid according to an hourly rate schedule.
Most importantly to this appeal, the contract’s bonus fee provision
stated, in pertinent part:
Upon approval of the removal of the restrictive covenant(s),
approval of the City of Hollywood and any other required
governmental agencies, [the architect] will be paid a Bonus Fee
in the amount of $2,500 per unit with a cap of $1,250,000. The
2
Bonus Fee shall be earned and payable upon receipt by the
Owner of all approvals and permits necessary to develop the
property in conformance with the Master Plan developed by
Architect for the Project. Notwithstanding the foregoing, the
Bonus Fee shall be deemed earned and payable upon the sale
by the Owner of the property to which the Master Plan
developed by the Architect applies if the votes necessary to
remove the covenant(s) restricting development of the property
have been recorded regardless of whether the governmental
approvals and permits necessary to develop the property have
been obtained. Should the approvals and permits necessary
to develop the property in conformance with the Master Plan
developed by the Architect not be received within five (5) years
of the date of this agreement, then the Architect’s right to
receive this Bonus Fee will terminate.
(emphasis added).
2. The Parties’ Arguments
The parties do not dispute that the architect performed the three work
phases, for which the owner paid the $250,000 base fee. The parties
further do not dispute that the architect performed additional services, for
which the owner paid according to the hourly rate schedule.
The parties also do not dispute that the two conditions referenced in
the bonus fee provision’s first sentence both occurred: (1) the neighboring
residents’ “approval of the removal of the restrictive covenant(s)” limiting
the property’s use to golf or recreational purposes; and (2) “approval of the
City of Hollywood and any other required governmental agencies,” of the
architect’s proposed master plan.
However, the parties dispute whether the condition referenced in the
bonus fee provision’s second sentence – the owner’s receipt of all
“approvals and permits necessary to develop the property in conformance
with the Master Plan” was in addition to, or synonymous with, the first
sentence’s two conditions of the (1) “approval of the removal of the
restrictive covenant(s)”; and (2) “approval of the City of Hollywood and any
other required governmental agencies” of the architect’s proposed master
plan.
3
a. The Owner’s Arguments
The owner argues that the second sentence’s condition was in addition
to the first sentence’s two conditions. More specifically, the owner argues,
the second sentence’s use of the phrase “approvals and permits necessary
to develop the property in conformance with the Master Plan,” means
further approvals, such as building permits, which also would be
necessary beyond the first sentence’s conditions of the restrictive
covenant’s removal and the master plan’s approval. According to the
owner, it never received any building permits, because it abandoned the
project when the real estate market crashed shortly after the City of
Hollywood approved the architect’s master plan. Thus, the owner argues,
due to the second sentence’s condition not occurring, it was entitled to a
summary judgment that the architect was not entitled to the bonus fee.
The owner, to support its interpretation of the bonus fee provision,
relies upon and applies certain rules of construction, as follows:
• “In construing a contract, the legal effect of its provisions should be
determined from the words of the entire contract.” Sugar Cane
Growers Co-op. of Fla., Inc. v. Pinnock, 735 So. 2d 530, 535 (Fla. 4th
DCA 1999). According to the owner, the bonus fee provision uses
“permits” three times, meaning the parties intentionally used that
word for its own purpose. Further, the contract contemplated the
master plan design phase would include “[a] professionally prepared
full color rendering . . . plus sketches and drawings of the proposed
project . . . for use in the permitting process.” (emphasis added).
• “Under Florida law, courts must give effect to the plain language of
contracts when that language is clear and unambiguous.” Homes
& Land Affiliates, LLC v. Homes & Loans Magazine, LLC, 598 F.
Supp. 2d 1248, 1269 (M.D. Fla. 2009) (citation omitted). According
to the owner, “permits” carries its own meaning of “[a]n official
document giving someone authorization to do something.” Oxford
Dictionary, http://en.oxforddictionaries.com/definition/permit.
• “As a general proposition, the use of different language in different
contractual provisions strongly implies that a different meaning was
intended.” Fowler v. Gartner, 89 So. 3d 1047, 1048 (Fla. 3d DCA
2012) (citation omitted). According to the owner, the second
sentence’s use of the word “permits” must mean something different
than the first and second sentences’ use of the word “approval.”
4
• “Language used in business documents . . . should be interpreted
as reasonable persons, knowledgeable about the business or
industry, would likely interpret them.” Hussmann Corp. v. UPS
Truck Leasing, Inc., 549 So. 2d 215, 217 (Fla. 5th DCA 1989).
According to the owner, even the architect’s project manager
testified that, in her experience, “it’s common parlance” in the
industry to refer to building permits simply as “permits.”
• Courts “will not interpret a contract in such a way as to render
provisions meaningless when there is a reasonable interpretation
that does not do so.” Moore v. State Farm Mut. Auto Ins. Co., 916 So.
2d 871, 877 (Fla. 2d DCA 2005). According to the owner, treating
the bonus fee provision’s second sentence as synonymous with the
provision’s first sentence renders the second sentence meaningless.
In the alternative to its primary argument that it is entitled to summary
judgment, the owner secondarily argues that if the first and second
sentences create an ambiguity, then neither party is entitled to summary
judgment, and the case should be set for trial so the parties can present
parol evidence to assist a jury in determining the bonus fee provision’s
conditions and whether those conditions were satisfied.
b. The Architect’s Arguments
The architect argues the second sentence’s condition was synonymous
with the first sentence’s two conditions. In other words, the architect
argues, “approvals and permits necessary to develop the property in
conformance with the Master Plan” means the same thing as the first
sentence’s conditions of the restrictive covenant’s removal and the master
plan’s approval. Thus, the architect argues, because the first and second
sentences’ synonymous conditions occurred, it was entitled to summary
judgment finding that it was entitled to the bonus fee.
To support its interpretation of the bonus fee provision, the architect
also relies upon and applies certain rules of construction, as follows:
• “[T]he intention of the parties must be determined from an
examination of the entire contract and not from separate phrases or
paragraphs,” Alamo Fin., L.P. v. Mazoff, 112 So. 3d 626, 630 (Fla.
4th DCA 2013) (citation omitted), and, “[a] primary rule of contract
construction is that where provisions in an agreement appear to
conflict, they should be construed so as to be reconciled, if possible.
In so doing, the court should strive to give effect to the intent of the
parties in accord with reason and probability as gleaned from the
5
whole agreement and its purpose,” Anarkali Boutique, Inc. v. Ortiz,
104 So. 3d 1202, 1205 (Fla. 4th DCA 2012) (citation omitted).
According to the architect, reading the entire contract as a whole,
the contract’s introduction required the architect to develop a
master plan and coordinate the obtaining of the necessary zoning
and other approvals from the applicable governmental entities and
neighboring landowners. The contract’s introduction did not
contemplate the architect having to obtain building permits. Thus,
the bonus fee provision cannot be interpreted as suggesting that
obtaining building permits was a condition precedent to obtaining
the bonus fee.
• “A true ambiguity does not exist merely because a contract can
possibly be interpreted in more than one manner. Indeed, fanciful,
inconsistent, and absurd interpretations of plain language are
always possible. It is the duty of the [courts] to prevent such
interpretations.” Am. Med. Int’l, Inc. v. Scheller, 462 So. 2d 1, 7 (Fla.
1984). According to the architect, the owner’s interpretation that
the building permits had to be obtained would produce an absurd
result, because obtaining building permits was wholly outside of the
architect’s control as the party solely performing master planning
services under the contract. In the architect’s words, “no prudent
architect . . . would leave a $1,250,000 bonus up to the whim of the
party paying for services, not performing them.”
• Courts “will not interpret a contract in such a way as to render
provisions meaningless when there is a reasonable interpretation
that does not do so.” Moore, 916 So. 2d at 877. According to the
architect, treating the bonus fee provision’s second sentence as
including additional conditions renders meaningless the first
sentence’s use of the phrase “will be paid a Bonus Fee” when the
first sentence’s conditions have been satisfied.
• “As a general rule, conditions precedent are not favored, and courts
will not construe provisions to be such, unless required to do so by
plain, unambiguous language or by necessary implication. . . . If the
terms of a contract are fairly susceptible of an interpretation which
will prevent a forfeiture, they will be so construed.” In re Estate of
Boyar, 592 So. 2d 341, 343 (Fla. 4th DCA 1992) (citation omitted).
According to the architect, because the bonus fee provision’s second
sentence does not use plain, unambiguous language to indicate that
obtaining building permits is a condition precedent, the second
sentence should not be construed as such. Doing so would cause a
6
forfeiture of the architect’s bonus fee, which was earned when the
first sentence’s plain and unambiguous conditions were satisfied.
3. Our Review
Our review is de novo. See Volusia Cty. v. Aberdeen at Ormond Beach,
L.P., 760 So. 2d 126, 130 (Fla. 2000) (standard of appellate review
applicable to grant of summary judgment is de novo); Jackson v. The
Shakespeare Found., Inc., 108 So. 3d 587, 593 (Fla. 2013) (a contract
interpretation matter is a question of law subject to de novo review);
Phillips Lake Worth, L.P. v. BankAtlantic, 85 So. 3d 1221, 1225 (Fla. 4th
DCA 2012) (“The question of whether contract language is ambiguous is
also reviewed de novo.”).
“Whether a contract provision is ambiguous is a question of law, to be
determined by the . . . court.” Hancock v. Brumer, Cohen, Logan, Kandell
& Kaufman, 580 So. 2d 782, 784 (Fla. 3d DCA 1991). “A contract should
be read as a whole.” Talbott v. First Bank Fla., FSB, 59 So. 3d 243, 245
(Fla. 4th DCA 2011).
“An agreement is ambiguous if as a whole or by its terms and conditions
it can reasonably be interpreted in more than one way.” Haggin v. Allstate
Invs., Inc., 264 So. 3d 951, 954 (Fla. 4th DCA 2019) (citation omitted); see
also Hancock, 580 So. 2d at 784 (“An ambiguous word or phrase in a
contract has been defined as susceptible of interpretation in opposite ways
or reasonably or fairly susceptible to different constructions.”) (citations
and internal quotations omitted).
Here, after reading the contract as a whole, and after considering the
rules of construction upon which both parties have relied, we conclude the
bonus fee provision is susceptible of interpretation in opposite ways and
reasonably or fairly susceptible to different constructions. The arguments
which each side has presented are both reasonable, and we can discern
no reason to favor one rule of construction over the others in this case.
Regarding the owner’s argument that the second sentence’s use of the
word “permits,” as opposed to the first sentence’s use of the word,
“approval,” should control here, we do recognize that “[a]s a general
proposition, the use of different language in different contractual
provisions strongly implies that a different meaning was intended.” Beach
Towing Servs., Inc. v. Sunset Land Assocs., LLC, 278 So. 3d 857, 861 (Fla.
3d DCA 2019) (citation omitted). However, if that interpretation is correct,
then we would have expected the bonus fee provision’s first and second
sentences to have been combined into one sentence, stating all the
7
conditions sequentially, and not separated into two sentences as occurred
here. Moreover, neither the bonus fee provision, nor the contract as a
whole, provides any guidance regarding the type of “permits” to which the
bonus fee provision is referring. While we recognize that the word
“permits” is often conjoined with the word “building” to create the term
“building permits,” we are not convinced without genuine issue of material
fact that the word “permits” was intended to mean only “building permits.”
Because we conclude that the bonus fee provision is reasonably
susceptible to more than one construction, we further conclude that a
genuine issue of material fact is presented which cannot be resolved by
summary judgment. See Dade Cty. Sch. Bd. v. Radio Station WQBA, 731
So. 2d 638, 643 (Fla. 1999) (“Because the terms of the agreement are
ambiguous and the record does not contain sufficient evidence to resolve
the dispute, summary judgment was improper.”); Fecteau v. Southeast
Bank, N.A., 585 So. 2d 1005, 1007 (Fla. 4th DCA 1991) (“When there are
two reasonable interpretations [of a contract], summary judgment is
inappropriate because there is a genuine issue of material fact.”); Universal
Underwriters Ins. Co. v. Steve Hull Chevrolet, Inc., 513 So. 2d 218, 219 (Fla.
1st DCA 1987) (“[W]here the terms of [a] written instrument are disputed
and reasonably susceptible to more than one construction, an issue of fact
is presented as to the parties’ intent which cannot properly be resolved by
summary judgment.”).
Based on the foregoing, we reverse and remand for a trial on the merits,
during which the parties may present parol evidence allowing the trier of
fact to interpret the bonus fee provision’s meaning. See Fecteau, 585 So.
2d at 1007 (“[W]hen a contract is ambiguous and the parties suggest
different interpretations, the issue of the proper interpretation is an issue
of fact requiring the submission of evidence extrinsic to the contract
bearing upon the intent of the parties.”) (citation omitted); Talbott, 59 So.
3d at 245 (“Where . . . a contract term is susceptible to more than one
reasonable interpretation, extrinsic evidence may be considered by the
court to ascertain the intent of the parties.”).
All of the other arguments which the owner and the architect have
made in this appeal are rendered moot by our decision.
Reversed and remanded for proceedings consistent with this opinion.
DAMOORGIAN and KLINGENSMITH, JJ., concur.
* * *
8
Not final until disposition of timely filed motion for rehearing.
9