Ac Holdings 2006, Inc. v. McCarty

• Decision Date: 28 May 2008
• Docket Number: No. 3D07-769.,3D07-769.
• Citation: 985 So.2d 1123
• Parties: AC HOLDINGS 2006, INC., Appellant/Cross-Appellee, v. John B. McCARTY and Patricia McCarty, Appellees/Cross-Appellants.
• Court: Florida District Court of Appeals

985 So.2d 1123

AC HOLDINGS 2006, INC., Appellant/Cross-Appellee, v. John B. McCARTY and Patricia McCarty, Appellees/Cross-Appellants.

No. 3D07-769.

District Court of Appeal of Florida, Third District.

May 28, 2008.

Rehearing Denied July 23, 2008.

Murai, Wald Biondo, Moreno & Brochin, Coral Gables and Allen P. Pegg, for appellant.

Wampler Buchanan Walker Chabrow Banciella & Stanley, Miami, for appellees.

Before RAMIREZ, SHEPHERD, and CORTIÑAS, JJ.

RAMIREZ, J.

This is an appeal and a cross-appeal from a final summary judgment of foreclosure of a $2 million mortgage. Because we conclude that there were genuine issues of material fact, we reverse.

The plaintiffs/appellees/cross-appellants, John B. McCarty and Patricia McCarty, his wife, sold their home, a waterfront property on San Marcos Island, Venetian Causeway, to AC Holdings 2006, Inc., the Appellant/Cross-Appellee, for a purchase price of $4.1 million At closing, they received $2.1 million and took back a $2 million mortgage secured by an interest-free purchase money note, maturing on December 18, 2006. It is undisputed that AC Holdings paid the $2 million by the December 18 deadline.

The foreclosure was based on the mortgage requirement that AC Holdings deliver to the McCartys an insurance policy for $2 million worth of hazard insurance.¹ The closing was moved up two weeks at the request of the McCartys, who were leaving for Europe and wanted to close before their departure. At closing, the mortgage gave AC Holdings fourteen calendar days, to June 2, 2006, to obtain the insurance.² If the insurance coverage was not procured within that time, interest would be due on the promissory note.

AC Holdings obtained insurance in the amount of $1,122,500, which represented the replacement value of the residence, but was unable to increase the coverage to $2 million by June 2, 2006. On June 6, counsel for the McCartys wrote to counsel for AC Holdings that the McCartys would forego filing a foreclosure action if AC Holding obtained suitable insurance coverage by June 13. The letter did not mention any default interest. Before the June 13 deadline, AC Holdings increased the coverage to $2 million. Unwilling to accept yes for an answer, the McCartys filed a foreclosure action on June 16.

In their amended complaint, the McCartys claimed that AC Holdings was obligated to obtain the required insurance by June 2, 2006, but failed to mention that: (1) AC Holdings had already obtained insurance in the amount of $1,122,500; (2) they had granted an extension in their June 6 letter until June 13; or (3) the amount of coverage had been increased to $2 million within the June 13 deadline. Even though the effective date on the policy was June 7, the McCartys apparently were unsatisfied because the premium for the $2 million policy was not paid until June 23, 2006.

The McCartys moved for summary judgment. Prior to the hearing on the motion, AC Holdings did not submit any affidavits or other documents in opposition to the motion for summary judgment. It is undisputed that former counsel for AC Holdings had been admitted to the Florida Bar less than one month prior to the filing of the foreclosure action. It is also clear that former counsel's conduct was totally inadequate. The trial court granted the McCartys' motion for summary judgment, finding that the purchase money note and mortgage were in default and that interest had accrued on the purchase money note and mortgage from the date of the original closing (i.e., May 19, 2006) at the daily rate of $1369.86. An evidentiary hearing was scheduled on the McCartys' motion for attorneys' fees.

AC Holdings moved for a rehearing. Instead of filing any affidavits, counsel stated that the "[d]efendant shall proffer to the court material evidence regarding factual matters and discrepancies of extensions to comply with insurance requirements and defendant concessions to close at a time prior to the stipulated contractual date...." Counsel attached a copy of the June 6 letter. Two days later, the trial court denied the motion.

New counsel thereafter filed a notice of appearance on behalf of AC Holdings together with a second motion for rehearing and/or reconsideration of the order granting the McCartys' motion for summary judgment, with an affidavit of Angel Torres. This motion also was denied. Ultimately, on February 28, 2007, the trial court entered a final judgment of foreclosure, which is the subject of the instant appeal. The court awarded the McCartys $366,459.04, which included the sum of $293,150.04 as interest from May 19, 2006, to December 18, 2006, and attorneys' fees of $72,787.50. It also awarded interest from the date of judgment at twenty-five percent. Additionally, the court found that the mortgage provided for interest to continue to accrue at the rate of twenty-five percent on the $2 million, even though that sum already had been paid and a final judgment had been entered, but it stated that "the Court in exercising its equitable jurisdiction and powers has determined that this provision will become effective on March 5, 2007, at 12:00 PM." Otherwise, AC Holdings would be liable for interest on the $2 million at twenty-five percent or $1369.86 per day.³ Not satisfied with their pound of flesh, the McCartys have cross-appealed, assigning error to the failure to award interest from December 19, 2006 to March 5, 2007.

We first reject the argument that the trial court could not consider defendant's motion for rehearing because a prior motion for rehearing had been denied. An order granting summary judgment is an interlocutory order, and a trial court has inherent authority to reconsider and modify its interlocutory orders. Bay N Gulf, Inc. v. Anchor Seafood, Inc., 971 So.2d 842, 843 (Fla. 3d DCA 2007); Bettez v. City of Miami, 510 So.2d 1242, 1243 (Fla. 3d DCA 1987).

Next, we consider whether the trial court abused its discretion in refusing to consider the Torres affidavit. There is case law to support the argument that a trial court does not abuse its discretion in refusing to consider a late affidavit. See Coffman Realty, Inc. v. Tosohatchee Game Pres., Inc., 381 So.2d 1164 (Fla. 5th DCA 1980) (holding that it is not an abuse of discretion for a trial judge to refuse to admit...