M & M Realty Partners at Hagen Ranch, LLC v. William Mazzoni

• Court: Court of Appeals for the Eleventh Circuit
• Decided: December 11, 2020
• Docket: 18-13536
• Status: Published

Opinion

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[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 18-13536 ________________________

D.C. Docket No. 9:17-cv-81135-RLR

M & M REALTY PARTNERS AT HAGEN RANCH, LLC, a New Jersey limited liability company,

Plaintiff – Appellant,

versus

WILLIAM MAZZONI, as Co-Trustee of the William Mazzoni Trust dated 06/04/1992, THOMAS A. SMITH, as Co-Trustee of the William Mazzoni Trust dated 06/04/1992, WILLIAM MAZZONI, Individually, WILLIAM MAZZONI TRUST DATED 06/04/1992,

Defendants – Appellees.

________________________

Appeal from the United States District Court for the Southern District of Florida ________________________

(December 11, 2020) USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 2 of 15

Before TJOFLAT, NEWSOM, and GINSBURG,* Circuit Judges.

GINSBURG, Circuit Judge:

M&M Realty Partners at Hagen Ranch, LLC, a New Jersey Limited

Liability Company, entered into a contract with the William Mazzoni Trust in 2011

for the purchase of a plot of land in Boynton Beach, Florida. The contract included

a six-year period for M&M to secure the permits necessary to develop the

property. M&M alleges, and the Trust disputes, that M&M sought to close the

transaction in conformance with the contract and the Trust refused. M&M seeks

specific performance of the land sale contract and damages from the Mazzoni

Trust, as well as damages from William Mazzoni, as co-trustee and agent of the

Trust, for tortious interference with the land sale contract.

As did the district court, we hold M&M failed to make out a prima facie

claim for specific performance or for damages for breach of contract because

M&M did not provide evidence that it was ready, willing, and able to perform

under the contract -- specifically, that it had the necessary funds to make the

purchase. We also hold William Mazzoni, as a co-trustee of the Defendant trust

and signatory as its agent on the contract, is not liable for tortious interference. We

therefore affirm the judgment of the district co

*Honorable Douglas H. Ginsburg, United States Court of Appeals for the District of Columbia Circuit, sitting by designation. 2 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 3 of 15

I.

In August 2011, M&M entered into a contract to buy from the Mazzoni

Trust a plot of land that M&M planned to develop into a shopping center. M&M is

a New Jersey Limited Liability Company the two members of which are also

Limited Liability Companies, to wit, JMP at Hagan Ranch, LLC, and JSM at

Hagan Ranch, LLC. JMP’s only member is the Joseph Marino Family Trust, of

which Joseph Marino is the sole trustee, and the beneficiaries of which are

Marino’s minor children. JSM’s two members and owners are Jack Morris and

Sheryl Weingarten. USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 4 of 15

The contract provided a “contingency period” of six years for M&M to

secure the necessary permits and approvals for its proposed development. The

purchase price was $5 million, with a potential increase based upon the projected

future revenue of the property once developed.

M&M alleges, and the Mazzoni Trust disputes, that the land sale contract

allowed M&M to close the sale at any time prior to the expiration of the six-year

contingency period. The Trust argues the provision of the contract increasing the

price based upon revenue from M&M’s development of the land indicates M&M

had to secure the necessary permits and approvals before it could close the sale.

M&M alleges that from 2011 through 2017 it expended substantial sums to

secure the permits and approvals necessary to develop the land. Meanwhile, it says

the Mazzoni Trust received a better offer for the land and, in pursuit of that offer,

attempted to avoid closing on its contract to sell the property to M&M. The Trust

acknowledges, and the district court found, that the Trust attempted to withdraw

from the contract in 2013 because it did not want to do business with M&M after

M&M failed to file progress reports on its development of the property and Morris

and Marino had sued it over an unrelated matter. For his part, William Mazzoni

admits he removed from the property official notices of public meetings as well as

“for lease” signs and on one occasion refused to sign documents related to M&M’s

4 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 5 of 15

efforts to get needed permits.1 M&M further alleges that, having secured the

necessary approvals, in May 2017 it notified the Trust of its desire to close the sale

that October. According to M&M, in June the Trust refused to close on the

grounds that the notice was deficient and that M&M had failed to complete some

of the contingencies under the agreement.

M&M then sued the Trust for specific performance and damages for breach

of the contract of sale and sued William Mazzoni seeking damages for his

allegedly tortious interference with that contract. All three parties moved for

summary judgment.

The district court held M&M failed to make out a prima facie claim for

specific performance or damages for breach of contract because it had not shown it

was ready, willing, and able to perform under the contract. More specifically, the

court held evidence that Messrs. Marino and Morris had funds available for the

closing was not sufficient to establish that M&M, the actual purchaser, had the

funds necessary to close. The district court also held that under the circumstances,

William Mazzoni, as the agent for a party, could not be liable for tortious

interference with the contract; given the Trust’s business reason for no longer

wanting to close on the contract – namely, Marino and Morris’s unrelated suit

1 M&M was able nonetheless to get the necessary permits because the contract of sale appointed M&M as Mazzoni’s “authorized signatory.” 5 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 6 of 15

against the Trust – he cannot be said to have acted solely out of malice, as required

by Florida law. Accordingly, the district court entered summary judgment for both

the Mazzoni Trust and William Mazzoni. For the reasons below we affirm.

II.

We review a grant of summary judgment de novo, drawing reasonable

inferences in favor of the non-moving party, here the Plaintiff M&M. Ellis v.

England, 432 F.3d 1321, 1325 (11th Cir. 2005). The substantive law governing

this diversity case is that of Florida.

A.

To establish a prima facie claim for specific performance of a contract or for

damages for breach of a contract, Florida law requires the plaintiff to show it was

ready, willing, and able to perform the contract. See, e.g., Hollywood Mall, Inc. v.

Capozzi, 545 So. 2d 918, 920 (Fla. Dist. Ct. App. 1989); Lusigman v. Lusigman,

972 So. 2d 1076, 1077–78 (Fla. Dist. Ct. App. 2008). A purchaser may show it is

financially ready and able by showing it has (1) the necessary “cash in hand,” (2)

“personal[] possess[ion] of assets . . . and a credit rating” that show a “reasonable

certainty to command the requisite funds,” or (3) “a binding commitment . . . by a

financially able third party.” Capozzi, 545 So. 2d at 920–21 (emphasis omitted). It

is undisputed that M&M, the purchaser in this case, had neither (1) the necessary

6 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 7 of 15

$5 million of cash in hand nor (2) assets and a credit rating sufficient to command

that sum. Therefore M&M’s only hope is to show it had (3) a binding commitment

from a financially able third party.

M&M argues that it was ready, willing, and able to perform under the

contract, first, because Morris and Marino could command credit from a bank in

excess of $5 million and, second, because Morris and Marino each had over $5

million in cash. As M&M is relying upon the resources of third parties, namely

Morris and Marino, to show it was ready, willing, and able to close, M&M’s

arguments properly go to the third possible showing, i.e., that it has a binding

commitment from a financially able third party. M&M argues that its principals’

personal resources are sufficient to show the company had a “reasonable certainty”

of being able to complete the purchase, but this falls short of the “binding

commitment” the law requires. Capozzi, 545 So. 2d at 920-21 (emphasis omitted).

Mere possession of funds by Morris or Marino does not establish that either

man had made a binding commitment – or, indeed, any commitment – to lend or

give those funds to M&M in order to close the deal. M&M relies upon Marino

having been the trustee and Morris a member-owner, respectively, of the two

members of the purchasing LLC, M&M, but to no avail. In Capozzi, a company

was held unable “to perform when its only ability [was] derived from funds not

within its control and subject to the gratuitous payment by another.” Id. at 920. In 7 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 8 of 15

that case, the non-binding commitment by Capozzi, chairman of the board of the

purchasing corporation -- which was wholly owned by his children -- to provide

funds to close the transaction was insufficient to establish the purchasing

company’s ability to “command” the requisite funds. Id. at 919–20. It necessarily

follows that in this case, where there is no commitment from Morris or Marino,

M&M was not ready, willing, and able to close the purchase.

M&M argues the lack of binding commitment was “only part of the court’s

analysis” in Capozzi; it went on to consider Capozzi’s financial ability to close the

transaction, which it found wanting. In contrast, Morris and Marino say they

“confirmed” that they each possessed sufficient funds to close the sale. M&M

argues the ability of Marino and Morris to command the necessary funds satisfied

the more flexible standard the Florida Supreme Court set out in Perper v. Edell,

where it said a purchaser need not be “standing outside of the office door with all

the cash in hand” but should be considered financially able if it can “command the

necessary money to close the deal on reasonable notice.” 35 So. 2d 387, 391 (Fla.

1948).

M&M once again, however, fails to explain how it, as the purchaser of the

property, could “command” the funds of Marino or Morris, neither of whom had

made a binding commitment to provide those funds. Although both gentlemen

undeniably have an interest in M&M’s business, their legal relationship to M&M is 8 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 9 of 15

mediated through two limited liability companies and a trust. As the district court

pointed out, if the situation were reversed and the Trust were suing M&M for

specific performance and damages, it clearly would be inappropriate to pierce

those corporate veils; so too is it inappropriate to disregard the corporate forms

Marino and Morris used here to insulate themselves from the would-be corporate

purchaser. Motorola Mobility LLC v. AU Optronics Corp., 775 F.3d 816, 820 (7th

Cir. 2015) (citation omitted) (“[A] corporation is not entitled to establish and use

its affiliates’ separate legal existence for some purposes, yet have their separate

corporate existence disregarded for its own benefit against third parties.”).

M&M’s failure to show it was ready, willing, and able to perform under the

contract is fatal to its claims for damages and specific performance under the

contract. Therefore, we do not need to address the Trust’s argument that the

contract terminated before M&M satisfied the conditions precedent to closing.

B.

We turn now to M&M’s claim against William Mazzoni for tortious

interference with its contract to purchase land from the Mazzoni Trust. In

response, Mazzoni points out that under Florida law neither a party to a contract

nor its agent can be held liable for interfering with his own contract. Ernie Haire

Ford, Inc. v. Ford Motor Co., 260 F.3d 1285, 1294 (11th Cir. 2001) (“Under

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Florida law, a claim for tortious interference with contract cannot lie where the

alleged interference is directed at a business relationship to which the defendant is

a party”); Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A., 742 So. 2d

381, 385-86 (Fla. Dist. Ct. App. 1999) (holding a party’s agent cannot tortiously

interfere because “the interfering defendant must be a third party, a stranger to the

business relationship”); see also Walter v. Jet Aviation Flight Servs., No. 9:16-CV-

81238, 2017 WL 3237375, at *8 (S.D. Fla. July 31, 2017); Hamilton v. Suntrust

Mortg. Inc., 6 F. Supp. 3d 1312, 1320 (S.D. Fla. 2014).

In this case William Mazzoni signed the contract as a trustee of the Mazzoni

Trust and acted as the agent of the Trust. Given the Trust’s economic interest in

terminating the contract, demonstrated by its 2013 effort to end the deal, William

Mazzoni’s attempts to thwart the contract were not actions taken out of malice

alone, or solely for ulterior purposes. William Mazzoni cannot, therefore, be held

liable for tortious interference with the contract.

C.

M&M next argues its claim for tortious interference with contract will lie

against Mazzoni because he comes within an exception for a party or agent who

used “improper means” to thwart the contract, Ethyl v. Balter, 386 So. 2d 1220,

1225 (Fla. Dist. Ct. App. 1980), here referring us to various things Mazzoni did to

10 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 11 of 15

frustrate M&M’s efforts to get the permits it needed. Mazzoni responds that,

because M&M never advanced the “improper means” exception in the district

court, the issue has been forfeited and cannot be raised on appeal. M&M replies

that it raised the issue in the district court by citing caselaw applying it.

Resolving this dispute over forfeiture would require the court to decide

whether the improper means exception is a “new issue” and therefore forfeit, or is

merely a “new argument” for why M&M should win on the issue of tortious

interference, and therefore properly before us. See in re Home Depot, 931 F.3d

1065, 1086 (11th Cir. 2019) (“There is a difference between raising new issues and

making new arguments on appeal. If an issue is properly presented, a party can

make any argument in support of that issue.”) (cleaned up).

We need not, however, engage in that line-drawing exercise because the

improper means exception is totally inapposite to this case. As mentioned in Part

II.B, Mazzoni acted as an agent of the Trust. Indeed, for the purposes of this case,

Mazzoni basically is the trust. Dist. Ct. Op. at 16 (“[T]he crux of Plaintiff’s

position is that Defendant Mazzoni essentially tortiously interfered with himself”).

M&M concedes as much. Br. of Appellant at 27 (“We do not challenge here the

trial court’s decision that Mr. Mazzoni’s interest as trustee was equivalent to an

interest in the trust’s contract”). The improper means exception simply does not

apply to the agent of a party to the contract. 11 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 12 of 15

Under Florida law, a person with “any beneficial or economic interest in, or

control over,” a contractual relationship is not considered a “stranger” to the

contract and therefore has a “privilege to interfere” in that relationship. Hamilton,

6 F. Supp. 3d at 1320. Being neither a contracting party nor someone acting on

behalf of a party, such a person is aptly described as an “interested third party.”

Palm Beach Cty. Health Care Dist. v. Prof’l Med. Educ., Inc., 13 So. 3d 1090,

1094 (Fla. Dist. Ct. App. 2009). The rationale for the privilege is to allow

interested third parties to interfere to “protect their own economic interests.”

Hamilton, 6 F. Supp. 3d at 1320; see also Palm Beach Cty., 13 So. 3d at 1095. The

improper means doctrine is an exception to this broader privilege. See Ethyl, 386

So. 2d at 1225 (“So long as improper means are not employed, activities taken to

safeguard or promote one’s own financial, and contractual interests are entirely

non-actionable”) (cleaned up and footnote omitted). This exception does not affect

the core rule that a tortious interference claim does not lie against an agent acting

within the scope of his agency, which stems from the bedrock understanding that a

contracting party is never liable for interfering with its own contract. While

interested third parties are not complete strangers to the contract, holding them

liable for interference when they use improper means is consistent with this

fundamental understanding because, unlike agents, they are not identified with the

contracting parties themselves.

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All the cases M&M cites for the improper means argument concern

interested third parties rather than agents acting on behalf of a contracting party.

For example, in KMS Restaurant Corp. v. Wendy’s International, Inc., Wendy’s

claimed a privilege to interfere with KMS’s purchase of franchise restaurants from

Citicorp because it was the franchisor and the purchase contract was conditioned

on its approval. 361 F.3d 1321, 1322, 1325-27 (11th Cir. 2004). The other cases

are no different. See Ethyl, 386 So. 2d 1221-23 (interference by creditor with

agreement between officer of bankrupt corporation and his financier); G.M. Brod

& Co. v. U.S. Home Corp., 759 F.2d 1526 (11th Cir. 1985) (interference by

developer of a lodge with management company’s relationships with company’s

employees and unit owners); Bluesky Greenland Env’t. Sols., LLC v. 21st Century

Planet Fund, LLC, 985 F. Supp. 2d 1356 (S.D. Fla. 2013) (interference with

distributorship agreement by competing distributor); Making Ends Meet, Inc. v.

Cusick, 719 So. 2d 926 (Fla. Dist. Ct. App. 1998) (interference by landlord with

lessee’s proposed sale of lease); McCurdy v. Collis, 508 So. 2d 380 (Fla. Dist. Ct.

App. 1987) (interference by Exxon with relationship between welding

subcontractor’s employee and his employer). By contrast, the facts of Salit

illustrate that interference liability based on improper methods does not apply to

agents of a party. The court held a corporate employee’s interference claim against

the corporation’s general counsel for inducing the termination of his employment

13 USCA11 Case: 18-13536 Date Filed: 12/11/2020 Page: 14 of 15

was not adequately pleaded unless the employee added allegations that the general

counsel was not acting in the corporation’s interests, even though the general

counsel allegedly engaged in fraudulent misrepresentation. Salit, 742 So. 2d at

383, 385-86; see also Hurchalla v. Lake Point Phase I, LLC, 278 So. 3d 58, 67

(Fla. Dist. Ct. App. 2019) (noting fraudulent misrepresentation is “ordinarily a

wrongful means of interference”).

M&M’s improper-methods claim is effectively an attempt to impose tort

liability on Mazzoni for the Trust’s breach of its own contract. This effort is in

direct contradiction to the principle that a party to a contract cannot tortiously

interfere with that contract. Subjecting a contracting party to interference liability

would convert breach of contract into a tort, which is clearly impermissible. See

Am. Int’l Land Corp. v. Hanna, 323 So. 2d 567, 569 (Fla. 1975) (“[A] breach of

contract cannot be converted into a tort merely by allegations of malice”). Tort

damages cannot be given for conduct in violation of a contract with the plaintiff

unless that conduct constitutes an independent tort. Nicholas v. Miami Burglar

Alarm Co., 339 So. 2d 175, 178 (Fla. 1976) (“Punitive damages are not

recoverable for breach of contract, irrespective of the motive of defendant except

where the acts constituting a breach of contract also amount to a cause of action in

tort”).

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In this case, there is no independent tort for which the Trust or Mazzoni

could be held liable. The allegedly improper nature of Mazzoni’s interfering acts

is based entirely on the claim that those acts violated the Trust’s contractual

obligations to M&M. Mazzoni allegedly refused to sign approval documents for

M&M’s permits, removed “for lease” signs from the property, and told people that

the sale would never close, but none of these actions were criminal or contrary to

any non-contractual right of M&M. Indeed, M&M could not even prove that the

Trust breached its contract by these actions. Imposing tortious interference

liability on Mazzoni, therefore, would be even more illogical than holding a breach

of contract tortious—it would hold actions tortious that did not even amount to a

breach.

III.

For the foregoing reasons, we agree with the decision of the district court

granting summary judgment in favor of William Mazzoni and the Mazzoni Trust.

If the result seems formalistic, that is only because the court is bound to give effect

to the corporate forms through which the plaintiff and its privies chose to contract.

The judgment is, therefore,

AFFIRMED.