Deakter v. Menendez

• Decision Date: 04 September 2002
• Docket Number: No. 3D01-1629.,3D01-1629.
• Citation: 830 So.2d 124
• Parties: Paula DEAKTER, as Successor Trustee of the Mendelson Living Trust, Appellant, v. Augusto MENENDEZ, Jr., Appellee.
• Court: Florida District Court of Appeals

830 So.2d 124

Paula DEAKTER, as Successor Trustee of the Mendelson Living Trust, Appellant, v. Augusto MENENDEZ, Jr., Appellee.

No. 3D01-1629.

District Court of Appeal of Florida, Third District.

September 4, 2002.

Reconsideration Denied November 27, 2002.

Isicoff, Ragatz & Koenigsberg and Daniel Stuzin and Eric Isicoff, for appellant.

Adorno & Zeder and Raoul G. Cantero, III, and Omar Ortega, for appellee.

Before JORGENSON, COPE and SORONDO, JJ.

PER CURIAM.

The Mendelson Living Trust, the plaintiff below,¹ appeals from a final summary judgment entered for Augusto Menendez, the defendant below; an order denying his motion for recusal of the trial judge; an order denying his motion for rehearing, vacation of final judgment and leave to amend the complaint; and an order determining Menendez's entitlement to fees. For the following reasons, we reverse.

FACTS AS ALLEGED BY MENDELSON

Harry Mendelson was the president, sole shareholder, and director of Delson Design International, Inc. (Delson Design). During the 1980s, Delson Design engaged in business with defendant Menendez and entities owned and controlled by him, including S.L. Associates, Ltd. On at least two occasions, Menendez, through S.L. Associates, asked Delson Design for loans, which Delson Design provided. S.L. Associates and Menendez failed to repay the loans. The parties agreed in 1987 that the sum owing was approximately $610,000. Therefore, in 1988, Menendez executed two notes, one for approximately $400,000 and the other for approximately $210,000, in favor of Delson Design ("the 1988 notes"). Menendez signed as a personal guarantor for S.L. Associates. S.L. Associates made some payments, but then filed for bankruptcy and listed Delson Design as an undisputed unsecured creditor in the amount of $593,597. No payments were made to Delson Design in the bankruptcy. In 1994, Mendelson contacted Menendez to resolve the balance owed on the 1988 notes.

The following facts alleged by Mendelson are disputed: Mendelson claims that in 1995 Menendez signed a renewal note ("the 1995 note") in the amount of $600,000, which was made payable to Mendelson personally as Delson Design had been dissolved. The 1995 note was prepared by Mike Anderson who was then Mendelson's attorney and son-in-law. Anderson kept the original and Mendelson kept a copy. Anderson unexpectedly died six weeks later. In October 1997, Mendelson and his wife created the Mendelson Living Trust, assigning all their property to the trust. Mendelson endorsed his photocopy of the 1995 note to the trust. When the 1995 note matured on March 2, 2000, Menendez failed to pay the $600,000 then due, despite Mendelson's demand for payment.

PROCEEDINGS BELOW

In July 2000, the Mendelson Trust, through Mendelson, sued for breach of the 1995 note. Prior to filing his first amended complaint, Mendelson claimed he was unable to locate the original of the note because his daughter had, without Mendelson's knowledge, destroyed her husband Mike Anderson's records some time after his death. Mendelson included in the amended complaint allegations he deemed necessary to sue on a lost note. Menendez asserted a counterclaim of spoliation of evidence, alleging that Mendelson intentionally destroyed the 1995 note and the underlying business records regarding the loans.

Menendez moved for summary judgment, which the trial court granted on several grounds. Mendelson then filed a verified motion for recusal of the trial judge and a motion for rehearing, vacation of final summary judgment, and leave to amend the complaint. Both motions were summarily denied citing Metropolitan Dade County v. Martinsen, 736 So.2d 794 (Fla. 3d DCA 1999) (holding that a party who engages in serious misconduct in discovery forfeits its right to proceed).

I. QUESTIONS OF FACT

On a motion for summary judgment, the court must read the record in the light most favorable to the non-moving party. See Kaufman v. Mutual of Omaha Ins. Co., 681 So.2d 747, 751 (Fla. 3d DCA 1996)

; see also Moore v. Morris, 475 So.2d 666, 668 (Fla.1985)(holding that summary judgment is inappropriate unless the facts of the case are so crystallized that disposition of questions of law are all that remain for the trial court to determine). The court may not encroach on the province of the trier of fact by electing to weigh the evidence or adjudging the credibility of the witnesses. See Sierra v. Shevin, 767 So.2d 524, 525 (Fla. 3d DCA 2000); Bitz v. Ed Knox CLU & Assoc., P.A., 721 So.2d 823 (Fla. 3d DCA 1998).

The trial court erred in granting summary judgment as there are several genuine issues of material fact which defeat summary judgment. See Young v. Curgil, 358 So.2d 58, 59 (Fla. 3d DCA 1978)

(holding that a cause can be dismissed for fraud only upon the "most blatant showing of fraud, pretense, collusion or other similar wrongdoing."); cf. Maharaj v. State, 778 So.2d 944, 956 (Fla.2000) (holding that proof of perjury requires proof of more than mere inconsistencies, memory lapse, unintentional error or oversight); Evans v. State, 603 So.2d 15, 17 n. 4 (Fla. 5th DCA 1992) ("If a witnesses's testimony is impeached with inconsistencies on material issues, as opposed to collateral matters, and thereby the witness's veracity and credibility are placed in question, the trier of fact is entitled to judge the witness's credibility in its entirety and accept or reject the witness's testimony on those and other issues as well."), quoted in Hanono v. Murphy, 723 So.2d 892, 893-894 (Fla. 3d DCA 1998); O'Donovan v. Citibank, 710 So.2d 654 (Fla. 3d DCA 1998) ("Whether the ... proffered proof of the note's essential terms was adequate for its reestablishment is a matter for determination by the trier of fact and should not be decided as a matter of law.").

II. ISSUES OF LAW

The trial court's remaining grounds for summary judgment are erroneous not only because the court made factual findings, but it also erred in its legal analyses.

A. Entitlement to Sue on a Lost Note

We first address the trial court's ruling that "the plaintiff could not demonstrate his entitlement to enforce a lost note under Florida Statute § 673.3091 because Plaintiff is unable to show (i) he was in possession of the alleged instrument and entitled to enforce it when loss of possession occurred; and (ii) that the loss of possession was not the result of a transfer."

1. Whether the Note Was Lost/Destroyed

The trial court erred in granting summary judgment because Mendelson does not know whether the note was lost or destroyed. See § 673.3091(1), Fla. Stat. (1993). Section 673.3091(1)(c) provides that the instrument must be lost, destroyed or stolen; in short, the person seeking to enforce the instrument must not be able to obtain the instrument. Mendelson and his daughter stated under oath that the 1995 note was either inadvertently destroyed or lost, which is all the statute requires. There is no requirement that Mendelson prove exactly how he lost possession of the note, i.e., whether he lost possession because it was lost or because it was destroyed. Menendez misreads our opinion in Cardet v. Rodriguez, 673 So.2d 578 (Fla. 3d DCA 1996) as holding that "a plaintiff seeking to enforce a lost note must conclusively demonstrate that the note was in fact lost." In Cardet, we merely held that the plaintiff, as the movant for summary judgment, failed to carry his burden by conclusively demonstrating that the note was lost. 673 So.2d at 578. Likewise, the defendant in this case has failed to carry his burden, as the movant for summary judgment, by conclusively demonstrating that the note was not lost or destroyed. See Sasson, 715 So.2d at 1067 (holding that the movant for a summary judgment has the burden of conclusively demonstrating the nonexistence of any genuine issue of material fact).

2. Whether Mendelson Had Possession When the Note Was Lost

The trial court erred as a matter of law in concluding that Mendelson is not entitled to enforce the note because he did not have physical possession of the note when the loss occurred. See § 673.3091(1), Fla. Stat. (1993). If Mendelson's attorney or his daughter had actual custody of the original 1995 note and Mendelson had the power to exercise control over it, then Mendelson had constructive possession of the note when it was lost. See Bush v. Belenke, 381 So.2d 315 (Fla. 3d DCA 1980)

(defining constructive possession as possession in which a person "has such control over the property that he may deliver the possession of it, if he so desires, as for example, where an agent holds property for his principal.").

3. Whether the Loss Was the Result of a Transfer

Next, the trial court erred in ruling that Mendelson cannot prove that loss of the 1995 note was not the result of a transfer. See § 673.3091(1)(b), Fla. Stat. (1993). Mendelson swore under oath that he did not assign or transfer the 1995 note and that the original was lost or destroyed. Not only does this testimony defeat summary judgment, but Menendez presented no evidence to the contrary. See Cheng v. Sirichoke, 745 So.2d 1152, 1153-1154 (Fla. 3d DCA 1999)

.

B. Consideration

The trial court erred as a matter of law in ruling that the 1995 note was unenforceable for lack of consideration. The trial court determined that the debt on the 1988 notes could not form the basis for consideration for the 1995 note because the 1988 debts were owed by S.L. Associates, not Menendez, and were owed to Delson Design, not Mendelson. It is undisputed that S.L. Associates' debt under the 1988 loans was discharged in bankruptcy, that no distribution was made to Delson Design or Mendelson, and that Menendez was the personal guarantor on the 1988 loans. Therefore, Menendez became individually obligated to Delson Design for repayment of the 1988 loans. See, e.g., Sure-Snap Corp. v. State of Vermont, 983 F.2d 1015, 1019 (11th Cir.1993)

(holding that the discharge of a debt in bankruptcy does not discharge...