Third District Court of Appeal State of Florida
Opinion filed August 17, 2022. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D21-0278 Lower Tribunal No. 19-10020 ________________
Marine Design Dynamics, Inc., Appellant,
vs.
All City Construction Services, LLC, Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Alan Fine, Judge.
The Bravo Law Firm, PLLC, and Jason Bravo, for appellant.
Business and Family Law Center, and Kraig S. Weiss (Weston), for appellee.
Before SCALES, MILLER and BOKOR, JJ.
BOKOR, J. Marine Design Dynamics, Inc., appeals a grant of summary judgment
and final judgment in favor of All City Construction Services, LLC, in a breach
of contract claim. Marine Design argues that the trial court erred by
concluding as a matter of law that the contract mandated All City receive a
40% share of certain payments as “net profits” under the contract. 1 The plain
language of the contract supports the trial court’s determination that the
payments at issue constitute “net profits.” However, the final judgment fails
to account for permissible deductions under the same contractual provision
for expenses incurred. Accordingly, we affirm the summary judgment order
but vacate the final judgment to permit further proceedings to determine
what, if any, monies should be deducted from the payment at issue before
allocating All City’s contractual share.
1 Marine Design challenges the denial of its post-judgment motion for reconsideration based on the same. Marine Design also raises several other issues concerning the timeliness, authentication, and sufficiency of the evidence presented in support of the opposing summary judgment motion. However, these issues may not now be presented for the first time on appeal. See, e.g., 12550 Biscayne Condo. Ass’n, Inc. v. NRD Invs., LLC, 336 So. 3d 750, 756 (Fla. 3d DCA 2021) (explaining that “[m]erely referring to an authority without expressly arguing to the lower court the principle that flows from it is inadequate to preserve the issue for review if the argument was not considered by the trial court”).
2 BACKGROUND
In 2017, Marine Design contracted with the Federal Emergency
Management Agency (FEMA) to provide charter vessels for hurricane relief
efforts in the U.S. Virgin Islands and Puerto Rico. To finance the vessel
procurement, Marine Design separately executed a joint venture agreement
with All City Construction Services, by which All City would provide an initial
investment of $1,600,000 and receive a 40% share of the “net profits” from
the FEMA contract after expenses, as well as reimbursement of investment
money. This agreement also included a clause providing that the contract
would automatically terminate if FEMA ceased its need for the services
sought for the venture.
Eleven days after the execution of the FEMA contract, and before
Marine Design had provided the requested services, FEMA terminated its
contract with Marine Design for convenience and issued a stop work notice.
Marine Design timely notified All City of the termination and returned All
City’s $1,600,000 investment pursuant to the terms of the contract.
Subsequently, Marine Design also requested FEMA reimburse reasonable
charges reflecting the percentage of work performed under the contract prior
3 to receiving the notice of termination, pursuant to 48 C.F.R. 52.212-4(l). 2
FEMA ultimately reimbursed Marine Design for $1,329,517.85 in reasonable
charges demonstrated.
All City then requested that Marine Design pay it a 40% share of that
FEMA payment, alleging that those monies constituted “net profits” within
the meaning of the joint venture agreement. When Marine Design refused,
All City sued Marine Design. After discovery, All City and Marine Design
both moved for summary judgment. In support of its motion, All City
proffered an email Marine Design had received from a FEMA contracting
officer describing the payment as “a percentage of the contract price
reflecting reasonable charges demonstrated in your effort to satisfy the
contract requirements,” alleging that FEMA had characterized the payment
as being for partial performance. Conversely, Marine Design argued that the
payment was properly characterized as a mandatory termination for
convenience fee that was not encompassed by the agreement’s definition of
“net profits,” emphasizing the fact that the same FEMA email mirrored the
2 Specifically, 48 C.F.R. 52.212-4(l), which was incorporated by reference into the FEMA contract, requires certain federal agency procurement contracts to include a termination for convenience clause providing that the agency may terminate at any time for its sole convenience, but that the contractor will then “be paid a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate.”
4 language of 48 C.F.R. 52.212-4(l) and stated that the “vessels were not
delivered and performance . . . never occurred.”
Following a hearing, the trial court concluded as a matter of law that
the $1,329,517.85 FEMA payment constituted “net profits” under the joint
venture agreement, granted summary judgment in All City’s favor, and
entered final judgment awarding All City 40% of the payment plus
prejudgment interest. After Marine Design unsuccessfully moved for
reconsideration, this appeal followed.
ANALYSIS
We review the trial court’s grant of summary judgment de novo. See,
e.g., Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126,
130 (Fla. 2000). 3 Summary judgment is proper when there are no genuine
issues of material fact and the moving party is entitled to prevail as a matter
of law. Id. Marine Design argues that genuine issues of material fact
precluded summary judgment as to the issue of whether the FEMA
reimbursement constituted a “net profit” for purposes of the profit-sharing
3 The standard of review for summary judgments in Florida has since changed to mirror the federal standard articulated in Celotex Corp. v. Catrett, 477 U.S. 317 (1986), with respect to judgments rendered after May 1, 2021. See In re Amends. to Fla. Rule of Civ. Proc. 1.510, 309 So. 3d 192, 195 (Fla. 2020). However, as the judgment at issue here was rendered before then, we instead apply the prior standard expressed above.
5 provision of the joint venture agreement. An issue of fact is “genuine” for
summary judgment purposes if it could allow a jury to return a verdict in favor
of the non-moving party, and an issue of fact is “material” if it could have any
bearing on the outcome of the case under the applicable law. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986).
The trial court correctly found that the $1,329,517.85 FEMA payment
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Third District Court of Appeal State of Florida
Opinion filed August 17, 2022. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D21-0278 Lower Tribunal No. 19-10020 ________________
Marine Design Dynamics, Inc., Appellant,
vs.
All City Construction Services, LLC, Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Alan Fine, Judge.
The Bravo Law Firm, PLLC, and Jason Bravo, for appellant.
Business and Family Law Center, and Kraig S. Weiss (Weston), for appellee.
Before SCALES, MILLER and BOKOR, JJ.
BOKOR, J. Marine Design Dynamics, Inc., appeals a grant of summary judgment
and final judgment in favor of All City Construction Services, LLC, in a breach
of contract claim. Marine Design argues that the trial court erred by
concluding as a matter of law that the contract mandated All City receive a
40% share of certain payments as “net profits” under the contract. 1 The plain
language of the contract supports the trial court’s determination that the
payments at issue constitute “net profits.” However, the final judgment fails
to account for permissible deductions under the same contractual provision
for expenses incurred. Accordingly, we affirm the summary judgment order
but vacate the final judgment to permit further proceedings to determine
what, if any, monies should be deducted from the payment at issue before
allocating All City’s contractual share.
1 Marine Design challenges the denial of its post-judgment motion for reconsideration based on the same. Marine Design also raises several other issues concerning the timeliness, authentication, and sufficiency of the evidence presented in support of the opposing summary judgment motion. However, these issues may not now be presented for the first time on appeal. See, e.g., 12550 Biscayne Condo. Ass’n, Inc. v. NRD Invs., LLC, 336 So. 3d 750, 756 (Fla. 3d DCA 2021) (explaining that “[m]erely referring to an authority without expressly arguing to the lower court the principle that flows from it is inadequate to preserve the issue for review if the argument was not considered by the trial court”).
2 BACKGROUND
In 2017, Marine Design contracted with the Federal Emergency
Management Agency (FEMA) to provide charter vessels for hurricane relief
efforts in the U.S. Virgin Islands and Puerto Rico. To finance the vessel
procurement, Marine Design separately executed a joint venture agreement
with All City Construction Services, by which All City would provide an initial
investment of $1,600,000 and receive a 40% share of the “net profits” from
the FEMA contract after expenses, as well as reimbursement of investment
money. This agreement also included a clause providing that the contract
would automatically terminate if FEMA ceased its need for the services
sought for the venture.
Eleven days after the execution of the FEMA contract, and before
Marine Design had provided the requested services, FEMA terminated its
contract with Marine Design for convenience and issued a stop work notice.
Marine Design timely notified All City of the termination and returned All
City’s $1,600,000 investment pursuant to the terms of the contract.
Subsequently, Marine Design also requested FEMA reimburse reasonable
charges reflecting the percentage of work performed under the contract prior
3 to receiving the notice of termination, pursuant to 48 C.F.R. 52.212-4(l). 2
FEMA ultimately reimbursed Marine Design for $1,329,517.85 in reasonable
charges demonstrated.
All City then requested that Marine Design pay it a 40% share of that
FEMA payment, alleging that those monies constituted “net profits” within
the meaning of the joint venture agreement. When Marine Design refused,
All City sued Marine Design. After discovery, All City and Marine Design
both moved for summary judgment. In support of its motion, All City
proffered an email Marine Design had received from a FEMA contracting
officer describing the payment as “a percentage of the contract price
reflecting reasonable charges demonstrated in your effort to satisfy the
contract requirements,” alleging that FEMA had characterized the payment
as being for partial performance. Conversely, Marine Design argued that the
payment was properly characterized as a mandatory termination for
convenience fee that was not encompassed by the agreement’s definition of
“net profits,” emphasizing the fact that the same FEMA email mirrored the
2 Specifically, 48 C.F.R. 52.212-4(l), which was incorporated by reference into the FEMA contract, requires certain federal agency procurement contracts to include a termination for convenience clause providing that the agency may terminate at any time for its sole convenience, but that the contractor will then “be paid a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate.”
4 language of 48 C.F.R. 52.212-4(l) and stated that the “vessels were not
delivered and performance . . . never occurred.”
Following a hearing, the trial court concluded as a matter of law that
the $1,329,517.85 FEMA payment constituted “net profits” under the joint
venture agreement, granted summary judgment in All City’s favor, and
entered final judgment awarding All City 40% of the payment plus
prejudgment interest. After Marine Design unsuccessfully moved for
reconsideration, this appeal followed.
ANALYSIS
We review the trial court’s grant of summary judgment de novo. See,
e.g., Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126,
130 (Fla. 2000). 3 Summary judgment is proper when there are no genuine
issues of material fact and the moving party is entitled to prevail as a matter
of law. Id. Marine Design argues that genuine issues of material fact
precluded summary judgment as to the issue of whether the FEMA
reimbursement constituted a “net profit” for purposes of the profit-sharing
3 The standard of review for summary judgments in Florida has since changed to mirror the federal standard articulated in Celotex Corp. v. Catrett, 477 U.S. 317 (1986), with respect to judgments rendered after May 1, 2021. See In re Amends. to Fla. Rule of Civ. Proc. 1.510, 309 So. 3d 192, 195 (Fla. 2020). However, as the judgment at issue here was rendered before then, we instead apply the prior standard expressed above.
5 provision of the joint venture agreement. An issue of fact is “genuine” for
summary judgment purposes if it could allow a jury to return a verdict in favor
of the non-moving party, and an issue of fact is “material” if it could have any
bearing on the outcome of the case under the applicable law. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986).
The trial court correctly found that the $1,329,517.85 FEMA payment
was subject to the profit-sharing provision of the joint venture agreement.
The agreement defines “Net Profits” as follows:
“Net Profits” are defined as the amount of operational cash flow, which is all cash other than capital contributions to the Venture, received from any source (including the net proceeds of the sale of Venture assets or property) less cash expended for expenses, indebtedness of the Venture (whether or not owed to any of the parties) and capital expenditures and reasonable reserves required in the discretion of All City for the Venture business, including but not limited to reserves and material costs.
(emphasis added). This definition necessarily encompasses the FEMA
payment because those monies were “cash other than capital contributions
to the Venture, received from any source.” Accordingly, while the parties
disagree about whether the payment constituted profit earned through partial
performance, a mere termination for convenience fee, or something else,
this distinction makes no difference under the definition of “net profits” in the
contract.
6 However, the final judgment awards All City 40% of the FEMA payment
without deducting expenses, as required by the same contractual provision.
The term “net profits” applies “less cash expended for expenses,
indebtedness of the Venture . . . and capital expenses and reasonable
reserves.” The parties did not present specific evidence as to the expenses
incurred in Marine Design’s efforts to comply with the FEMA contract prior to
its termination, though the record reflects that Marine Design alleged
incurring significant expenses in its correspondence with the FEMA officer,
for which it ultimately received the $1,329,517.85 at issue as “reasonable
fees incurred for the contract.” Accordingly, while we affirm the summary
judgment order as it finds that the monies received constitute “net profits”
under the agreement, the issue of any possible deduction for expenses
authorized by that same contractual provision remained outstanding and
outside the issues decided in the well-reasoned summary judgment order.
Therefore, we vacate the final judgment and remand for further proceedings
to account for permissible deductions, if any, before calculating All State’s
40% share of the remaining funds.
Affirmed in part, reversed in part, and remanded with instructions.