TPC OVERTOWN BLOCK 45, LLC, etc. v. DOWNTOWN RETAIL ASSOCIATES, LLC, etc.

• Court: District Court of Appeal of Florida
• Decided: August 16, 2023
• Docket: 21-2118
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed August 16, 2023. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D21-2118 Lower Tribunal No. 20-7207 ________________

TPC Overtown Block 45, LLC, etc., et al., Appellants,

vs.

Downtown Retail Associates, LLC, etc., et al., Appellees.

An Appeal from the Circuit Court for Miami-Dade County, Michael A. Hanzman, Judge.

Armstrong Teasdale LLP, and Glen H. Waldman, and Jeffrey R. Lam, for appellants.

Kluger, Kaplan, Silverman, Katzen & Levine, P.L., and Alan J. Kluger, Marko F. Cerenko, Steve I. Silverman, and Lisa J. Jerles, for appellees.

Before LOGUE, C.J., and LINDSEY, and LOBREE, JJ.

LINDSEY, J. Appellants TPC Overtown, LLC; WW OGP 45, LLC; and Overtown

Gateway Partners, LLC appeal a Final Judgment entered in favor of

Appellees Downtown Retail Associates, LLC and Michael Swerdlow. The

trial court correctly interpreted the contract at issue, and because

interpretation of the contract was purely a question of law, summary

judgment was proper. Accordingly, we affirm.

I. Background

The underlying breach of contract action arises from a dispute between

two developers interested in an Overtown development project. In 2013, the

Southeast Overtown/Park West Community Redevelopment Agency (the

“Agency”), a public agency that encourages development in Overtown, held

a formal bidding process for the exclusive right to negotiate development

agreements for two vacant properties: Block 45 and Block 55. The Agency

ultimately awarded the exclusive negotiation rights to Overtown Gateway

Partners, LLC (“OGP”).

After OGP secured approval to negotiate development, it signed a

“Limited Liability Company Membership Interest Purchase and Sale

Agreement” (the “MIPSA”) with Downtown Retail Associates, LLC

(“Downtown Retail”). The MIPSA contemplated a transaction whereby

2 OGP 1 would sell, and Downtown Retail would purchase, all outstanding

membership interests in OGP—including the exclusive right to negotiate

development agreements for Block 45 and Block 55. It further outlined a due

diligence period that would begin on the effective date and extend until either

April 15, 2016, or five days after Downtown Retail and Michael Swerdlow,

who led Downtown Retail, received a “final” Block 55 development

agreement. Swerdlow personally joined the MIPSA, and agreed to be bound

by the provisions of the contract that are at issue in this litigation.

Due to a high level of distrust between OGP and Downtown Retail

going into the transaction, the MIPSA was heavily negotiated and contained

certain restrictive covenants. Two of these restrictive covenants are at issue:

a confidentiality clause and a non-circumvention provision. Provisions of the

MIPSA addressing confidentiality 2 entitled OGP to damages if development

terminated because of a breach of confidentiality. Specifically, the

confidentiality clause at issue stated that “a claim for damages shall arise

only in the event that the [Agency] terminates the Block 45 Development

Agreement and/or the negotiations involving the Block 55 Development

1 More specifically, two entities called TPC Overtown Block 45, LLC and WW OGP 45, LLC sold a third entity called OGP 45 Manager, LLC, which owned 100% of OGP–including the development rights to Block 45 and Block 55. 2 The confidentiality clause is in Sections 4.4.1, 4.1.2, and 4.1.3 of the MIPSA.

3 Agreement due solely to a Confidentiality Breach . . . .” (Emphasis

added).

The non-circumvention provision 3 entitled OGP to damages if Swerdlow or

Downtown Retail were to “enter into” any direct or indirect agreement with

the Agency to develop Block 45 and Block 55, before either the MIPSA was

“consummate[d]” or “during the period which is eighteen (18) months after

termination or expiration of [the MIPSA].” (Emphasis added).

Before the due diligence period had expired, the Agency and OGP

voluntarily entered into a Termination Agreement to end ongoing

development at Block 45. In their Termination Agreement, both the Agency

and OGP agreed that “[a]s a result of the inability of the Parties to complete

necessary documentation on a timely basis, [OGP] and the [Agency] each

desire to exercise their respective termination rights . . . .” As a result, the

Block 45 development was terminated.

The Block 55 development was still under negotiation. However,

tensions between OGP and the Agency were strained. Through counsel,

OGP wrote an email expressing “escalating concerns” about actions

purportedly taken by the Agency that “likely violate[d] several laws.” The

Agency responded to what it called “false allegations, insults, and legal

3 The non-circumvention provision is Section 4.3 of the MIPSA.

4 threats” by “invoking its right to terminate negotiations as of the date of this

letter.”

Since the underlying developments were terminated before the due

diligence period ended, the MIPSA itself was terminated, and OGP

subsequently sued for damages. In Count I of the operative complaint, OGP

alleged that Downtown Retail and Swerdlow had violated the confidentiality

clause at the time the Block 45 development was terminated. In Count II,

OGP alleged that Downtown Retail and Swerdlow had violated the non-

circumvention provision at the time the Block 55 development was

terminated.

Downtown Retail and Swerdlow moved for summary judgment on both

counts. Initially, the trial court entered an Omnibus Order denying this first

motion for summary judgment without prejudice. As to Count I, the trial court

ordered “parol evidence from the MIPSA’s drafting lawyers and the parties

on what the intentions were” regarding the confidentiality clause. As to

Count II, the trial court permitted the parties to take discovery, stating that

“at this time neither party has demonstrated the absence of a genuine issue

of material fact . . . in the event the facts are undisputed the Court will

entertain a motion(s) for summary judgment on this issue at a later date.”

5 Downtown Retail and Swerdlow again moved for summary judgment

on Count II, violation of the non-circumvention provision. The trial court

noted undisputed evidence that Swerdlow and Downtown Retail had not

breached the non-circumvention provision of the MIPSA. The trial court

stated that after reviewing the parties’ briefing and entertaining oral

argument, it was apparent that “[the non-circumvention] provision is clear

and unambiguous” and that “during this eighteen (18) month restrictive

period Swerdlow did not ‘enter into’ or ‘consummate’ any transaction with the

[Agency] involving the acquisition or development of the property subject to

the MIPSA (referred to as Blocks 45 and 55).” Accordingly, the trial court

entered summary judgment in favor of Downtown Retail and Swerdlow on

Count II.

Downtown Retail and Swerdlow then moved for summary judgment on

Count I, violation of confidentiality. The trial court entered an order granting

their motion, finding that now the record was “undisputed” that termination

was not “due solely” to a confidentiality breach. The trial court further noted

unrebutted testimony that “over time, discussions between the [Agency] and

OGP deteriorated, and grew contentious” and that “the [Agency put in

writing] that it was terminating Block 55 discussions . . . and made it clear

why it was doing so . . . .” It further stated that “no reasonable finder of fact

6 could conclude that OGP’s September letter did not contribute, at least in

some part, to the [Agency’s] decision to terminate its discussions with OGP

regarding Block 55. Thus, even assuming an actionable confidentiality

breach exists, such does not satisfy the ‘due solely’ requirement of the

MIPSA.” Accordingly, the trial court entered summary judgment in favor of

Downtown Retail and Swerdlow on Count I.

The trial court then entered Final Judgment, incorporating both

summary judgment orders, in favor of Downtown Retail and Swerdlow.

OGP appeals.

II. Standard of Review

Our standard of review for an order granting summary judgment is de

novo. Ibarra v. Ross Dress for Less, Inc., 350 So. 3d 465, 467 (Fla. 3d DCA

2022).

III. Analysis

A. Count II – Non-Circumvention 4

4 The Motion for Summary Judgment on non-circumvention was filed, and an order entered, before the revisions to Florida Rule of Civil Procedure 1.510. The then-applicable standard was that summary judgment should be granted where “the pleadings and summary judgment evidence on file show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fla. R. Civ. P. 1.510 (effective to April 30, 2021).

7 In its Final Summary Judgment Order, the trial court “ruled that no

genuine dispute of material fact exists on this claim and concluded that there

was no breach of the non-circumvention provisions of Section 4.3 of the

[MIPSA].” Appellants contend that the non-circumvention clause prohibited

Downtown Retail and Swerdlow from taking preparatory steps to pursue a

transaction, such as negotiating terms or even expressing interest in the form

of a bid. However, Section 4.3 of the MIPSA only prohibits “enter[ing] into”

and “consummat[ing]” any “transaction” with the CRA or a contracting entity

during an 18-month period. 5

The plain meaning of Section 4.3 prohibits “Purchaser, Swerdlow

and/or its or his affiliated entities” from “enter[ing] into a transaction”—i.e.,

becoming a party to a transaction—with the Agency without written

permission during a specific time period. But nothing in the plain language

5 Appellants contend that the phrase “enter into” means “to participate or share in” according to the third definition in Merriam-Webster’s online dictionary. However, in doing so, they ignore the first two more contextually appropriate definitions: “to make oneself a party to or in,” and “to form or be part of.” Black’s Law Dictionary similarly defines “enter” as follows: “To become a party to .” ENTER, Black’s Law Dictionary (11th ed. 2019). As Scalia and Garner observe, “[m]ost common English words have a number of dictionary definitions, some of them quite abstruse and rarely intended. One should assume the contextually appropriate ordinary meaning unless there is reason to think otherwise.” Antonin Scalia & Brian A. Garner, Reading Law: The Interpretation of Legal Texts 70 (2012).

8 prohibits preparatory steps towards such a transaction. Here, it is

undisputed that Downtown Retail and Swerdlow did not enter into a

transaction with the Agency within the time period prohibited by the MIPSA.

Summary judgment was therefore appropriate.

B. Count I – Confidentiality 6

In its Final Summary Judgment Order, the trial court “ruled that no

genuine dispute of material fact exists on this claim and concluded that the

[Agency] did not terminate negotiations with [OGP 7] ‘due solely to

confidentiality breach’ as required in order to state a viable claim pursuant to

the MIPSA.” Appellants contend that the record contains sufficient evidence

of causation for a trier of fact to find that termination occurred only because

of meetings and negotiations that purportedly constituted a breach of

confidentiality.

Section 4.1.2 of the MIPSA plainly allows liability to attach only if the

termination is “due solely to a Confidentiality Breach (and not because of any

6 The Motion for Summary Judgment on confidentiality was filed, and an order entered, after the revisions to Florida Rule of Civil Procedure 1.510. The new standard deliberately reflects the federal rule. Summary judgment should be granted where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fla. R. Civ. P. 1.510 (effective May 1, 2021). 7 The original language referred to “Plaintiffs”—more specifically, TPC Overtown Block 45, LLC, WW OGP 45, LLC, and Overtown Gateway Partners, LLC.

9 act or omission of or by Seller or others) . . . or for any other reason or event.”

Therefore, if there is any other reason that the Agency terminated

negotiations, even if there was also a confidentiality breach, liability cannot

attach under this section because the termination is not due solely to the

breach of confidentiality. Here, the undisputed record shows that the Block

45 termination was mutual. It is undisputed that the Agency did not terminate

negotiations due solely to a breach of confidentiality as prohibited by the

MIPSA. Summary judgment was therefore appropriate.

IV. Conclusion

Construction of the contract at issue was purely a question of law

suitable for resolution by summary judgment. The trial court correctly

enforced the MIPSA as it was agreed to by the parties. At no point did TPC

Overtown, LLC; WW OGP 45, LLC; and Overtown Gateway Partners, LLC

meet the applicable burden to show a genuine issue of material fact.

Therefore, summary judgment was appropriate, and we affirm the trial

court’s decision.

Affirmed.