E-Commerce Coffee Club v. Miga Holdings, Inc.

222 So. 3d 9, 2017 WL 2814793, 2017 Fla. App. LEXIS 9413
CourtDistrict Court of Appeal of Florida
DecidedJune 28, 2017
DocketNo. 4D15-3899
StatusPublished
Cited by1 cases

This text of 222 So. 3d 9 (E-Commerce Coffee Club v. Miga Holdings, Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E-Commerce Coffee Club v. Miga Holdings, Inc., 222 So. 3d 9, 2017 WL 2814793, 2017 Fla. App. LEXIS 9413 (Fla. Ct. App. 2017).

Opinion

Forst, J.

The complex and convoluted history of the purchase of a business by Appellant E-Commeree Coffee Club from the Appel-lees involved at least three separate lawsuits and an appeal from judgment in one of those three. The parties attempted to settle these suits through a single agreement (“the Settlement Agreement”). In this action initiated by Appellant to enforce the Settlement Agreement, we hold that the trial court made several significant errors in its handling of evidence below. Therefore, we reverse and remand for a new hearing in all respects.

Background

The proceedings between Appellant and the Appellees involve the sale of a coffee-distribution business from the latter to the former. As part of the sale process, Appel-lees hired an accountant named Phil Shechter to create a report valuing the business being sold. Shechter produced a report for Appellees which valued the business at approximately $1.2 million. This report (“Report 1”) also stated that the opinions expressed were based on the information available to Shechter at the time and that he reserved the right to update the report should additional information become available.

After Report 1 was created, Appellees filed with the trial court an affidavit created by Jason Eisner, one of the Appellees. This affidavit stated that the business being sold had marketing expenses in 2011 of approximately $662,000.

Following the creation of Report 1 and the filing of the Eisner Affidavit, the parties entered into the Settlement Agreement in an attempt to resolve all four pending actions. Section 6 of the Settlement Agreement states in relevant part:

The Parties acknowledge that Phil Shechter, Global’s valuation expert, is in [11]*11the process of preparing a Revised Supplemental Valuation Report. (“Supplemental Report or Final Valuation”)....
The Parties and specifically, [Buyers] stipulate and agree, that each of them shall be bound by Phil Shechter’s Final Valuation, which said Valuation shall be conclusive and binding upon all the Parties. However, both parties reserve the right to verify Phil Schechter’s conclusions and contest his findings.

After the Settlement Agreement was drafted, Shechter submitted an “Updated Expert Report” (“Report 2”). In Report 2, Shechter recognized that he had been hired by both Appellant and Appellees, rather than by Appellees alone as he was for Report 1. Report 2 concluded that the business being sold was valued at either $527,000 or $821,000 depending on whether certain sales should be considered. Report 2 did not take into account any overhead costs or marketing expenses.

The same day as Report 2 was issued, Appellees moved the court to compel settlement under the agreement. In the meantime, Appellant took issue with Report 2’s failure to include overhead and marketing expenses and contacted Shechter. Realizing that the parties disagreed on the nature of the service he was to provide, Shechter agreed to issue a new report which included the items desired by Appellant.

Shechter’s final report, “Report 3,” valued the sold business at $190,000. This report considered the $662,000 in marketing expenses described in the Eisner Affidavit. Appellant moved the court to recognize Report 3 as the “Revised Supplemental Valuation Report” (“RSVR”) described in Section 6 of the Settlement Agreement and to enforce that agreement.

At the hearing on the enforcement of the Settlement Agreement, Appellant sought to introduce evidence of Report 1 and other pre-agreement documentation to show the intent of the parties regarding the term “RSVR.” The trial court largely agreed with Appellees that pre-agreement evidence, including Report 1, was inadmissible.

Toward the end of the hearing, evidence was introduced which indicated that the Eisner Affidavit, which Appellant argues induced it into entering the Settlement Agreement in the first place, was fraudulent in both its contents and in the fact that it was not properly executed. The trial court struck not only the affidavit but also all evidence and testimony regarding Report 3 because that report was based, in part, upon the affidavit. Appellant attempted to introduce other evidence at the hearing which would support Report 3’s consideration of $662,000 in marketing expenses, but the trial court abruptly cut off the parties, asked for proposed final orders, and stated “I’m done.”

The trial court subsequently entered an order enforcing the Settlement Agreement and finding Report 2 to be the RSVR contemplated by the agreement. This appeal followed.

Analysis

The appeal raises a wide range of issues to this Court, but we need not and do not address them all. Each stem from a single underlying error which our reversal should resolve—the trial court’s failure to admit relevant evidence and its cutting off Appellant’s attempts to present further evidence.

Trial court determinations of the relevancy of evidence are reviewed for an abuse of discretion. Thigpen v. United Parcel Servs., Inc., 990 So.2d 639, 645 (Fla. 4th DCA 2008). Whether a contract is ambiguous is reviewed de novo. Bd. of Trs. of the Internal Improvement Tr. Fund v. [12]*12Lost Tree Vill. Corp., 805 So.2d 22, 26 (Fla. 4th DCA 2001).

Here, Appellant attempted to introduce evidence'that the term “RSVR,” as used in the Settlement Agreement, was ambiguous. We agree that the- term was ambiguous as defined in Section 6 of the Settlement Agreement. The second paragraph of Section 6 states that the RSVR “shall be conclusive and binding , upon all the Parties.” The very next sentence, however, states that , “both, parties reserve the right to verify Phil Shechter’s conclusions and contest his findings.”

“A patent ambiguity is intrinsically apparent on the face of the document due to ‘the use of defective, obscure, or insensible language.”’ Nationstar Mortg. Co. v. Levine, 216 So.3d 711 (Fla. 4th DCA 2017) (quoting Emergency Assocs. of Tampa, P.A. v. Sassano, 664 So.2d 1000, 1002 (Fla. 2d DCA 1995)). An internal contradiction can constitute a patent ambiguity. Id. Here, there is a clear internal contradiction in stating that the RSVR “shall be conclusive and binding upon all the Parties” but then providing that “both parties reserve the right to verify Phil Shechter’s conclusions and contest his findings.” Thus, the intent of the parties with respect to the finality of the in-the-works Shechter report’s findings and conclusions is unclear from the face of the document.

On remand, the court should consider the relevant evidence going to the meaning of the term “Revised Supplemental Valuation Report” in determining which, if either, of Reports 2 and 3 was the “RSVR” contemplated by the parties via the Settlement Agreement. The court should also allow Appellant to present evidence beyond the Eisner Affidavit which might support the conclusions in Report 3. See Elmore v. Enterprise Developers, Inc., 418 So.2d 1078, 1079 (Fla. 4th DCA 1982) (“Where, the language of a contract is ambiguous or uncertain ip meaning, the court may receive evidence extrinsic to the contract for the purpose of determining the intent of the parties at the time they executed the contract.”).

Additionally, “[t]he constitutional guarantee of due process, dictates a full and fair opportunity to he heard in judicial proceedings. The failure to give a party the chance to present witnesses.or testify violates this fundamental, right.”

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Bluebook (online)
222 So. 3d 9, 2017 WL 2814793, 2017 Fla. App. LEXIS 9413, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-commerce-coffee-club-v-miga-holdings-inc-fladistctapp-2017.