Eagle FL VI Spe, LLC v. T & A Family P'ship, Ltd.

• Decision Date: 30 October 2015
• Docket Number: No. 2D14–870.,2D14–870.
• Citation: 177 So.3d 1277
• Parties: EAGLE FL VI SPE, LLC, a North Carolina limited liability company, as successor by assignment to Branch Banking and Trust Company, a North Carolina banking corporation, as successor-in-interest to Colonial Bank by asset acquisition from the FDIC as Receiver for Colonial Bank, Appellant, v. T & A FAMILY PARTNERSHIP, LTD., a Florida limited partnership; CRF–Maitland, LLC, a Florida limited liability company; Lawrence T. Maxwell, individually; William D. Drost, individually; and Deer Creek Commercial North Owners' Association, Inc., a Florida corporation, Appellees.
• Court: Florida District Court of Appeals

177 So.3d 1277

EAGLE FL VI SPE, LLC, a North Carolina limited liability company, as successor by assignment to Branch Banking and Trust Company, a North Carolina banking corporation, as successor-in-interest to Colonial Bank by asset acquisition from the FDIC as Receiver for Colonial Bank, Appellant,

v.T & A FAMILY PARTNERSHIP, LTD., a Florida limited partnership; CRF–Maitland, LLC, a Florida limited liability company; Lawrence T. Maxwell, individually; William D. Drost, individually; and Deer Creek Commercial North Owners' Association, Inc., a Florida corporation, Appellees.

No. 2D14–870.

District Court of Appeal of Florida, Second District.

Oct. 30, 2015.

Christopher D. Donovan of Roetzel & Andress, LPA, Naples, and W. Glenn Jensen, and Mychal J. Katz of Roetzel & Andress, LPA, Orlando, for Appellant.

Alan L. Perez and Thomas C. Saunders of Saunders Law Group, Bartow, for Appellee T & A Family Partnership, Ltd., a Florida limited partnership.

No appearance for remaining Appellees.

KHOUZAM, Judge.

This appeal arises from three commercial foreclosure and deficiency actions, consolidated below because the loans had the same guarantors—T & A Family Partnership, William D. Drost, and Lawrence T. Maxwell. The Partnership and Drost stipulated to foreclosure judgments with Branch Banking and Trust Company (BB & T) and later stipulated to deficiency judgments with Eagle FL VI SPE, LLC, as assignee of BB & T's foreclosure judgments.

Maxwell, on the other hand, challenged Eagle's motions for deficiency judgments, arguing that Eagle lacked standing to enforce his guaranties. The trial court agreed and denied Eagle's motions for deficiency judgment in all three cases. This court per curiam affirmed. See Eagle FL VI SPE, LLC v. Maxwell, 104 So.3d 1095 (Fla. 2d DCA 2012) (table decision); Eagle FL VI SPE, LLC v. Maxwell, 105 So.3d 530 (Fla. 2d DCA 2013) (table decision) (the Maxwell appeals).

After Maxwell successfully challenged Eagle's standing, the Partnership and Drost sought to set aside their stipulations for deficiency judgments, arguing that they were laboring under a mistake of fact at the time they entered into the stipulations because they believed that Eagle had standing to pursue deficiency judgments against them. The Partnership and Drost sought discovery, but Eagle and BB & T successfully challenged it and no discovery was conducted. See Eagle FL VI SPE, LLC v. Cypress Creek Plaza, LLC, 128 So.3d 950 (Fla. 2d DCA 2013) (granting Eagle and BB & T's petition for writ of certiorari and quashing the circuit court's order that had denied Eagle and BB & T's motion for protective order and compelled discovery). The circuit court set aside the stipulations for entry of deficiency judgments and entered final judgments for the Partnership and Drost. This appeal challenges the set-aside order and final judgment as to the Partnership only. Because the Partnership has not shown good cause to set aside the stipulations, we reverse both the set-aside order and the final judgment. On remand, the trial court shall enforce the settlement agreement as well as the stipulations and enter deficiency judgments in favor of Eagle in all three of the cases consolidated below.

I. STANDARD OF REVIEW

Generally, we review the trial court's decision on a motion to set aside a settlement agreement for an abuse of discretion. See Prestige Valet, Inc. v. Mendel, 14 So.3d 282, 283 (Fla. 2d DCA 2009). But where the trial court's decision is purely one of law, we review it de novo. See Casteel v. Maddalena, 109 So.3d 1252, 1255 (Fla. 2d DCA 2013). Moreover, in cases like this one "[w]here a trial court rules on the basis of a written record and not on testimony requiring credibility determinations, the appellate court has before it everything the trial court reviewed, and we have the same opportunity to weigh it as the trial court did." Town of Jupiter v. Alexander, 747 So.2d 395, 399 (Fla. 4th DCA 1998).

II. MISTAKE OF FACT

Eagle argues that the trial court erred in vacating the stipulations because the Partnership failed to show a mistake of fact. We agree. Settlement agreements are contracts. See Point Mgmt., Inc. v. Dep't of Bus. Regulation, Div. of Fla. Land Sales & Condos., 449 So.2d 306, 307 (Fla. 4th DCA 1984). Therefore, "[s]ettlements are construed in accordance with the rules for interpretation of contracts." Feldman v. Kritch, 824 So.2d 274, 277 (Fla. 4th DCA 2002). "When the parties entered into the settlement agreement, their rights and duties merged into that agreement and its provisions became binding on the parties and the trial court." M & C Assocs. v. State, Dep't of Transp., 682 So.2d 640, 640 (Fla. 2d DCA 1996).

"In order to obtain relief from a stipulation, a party must make a reasonable motion to withdraw the stipulation supported by an affidavit showing good cause." Henrion v. New Era Realty IV, Inc., 586 So.2d 1295, 1298 (Fla. 4th DCA 1991). Relief is not warranted "where it appears that the stipulation was voluntarily undertaken and there is no indication that the agreement was obtained by fraud, misrepresentation, or mistake of fact." Id.

[T]he general rule is that a party will be relieved from a stipulation entered into under a mistake as to a material fact, if there has been reasonable diligence exercised to ascertain such fact. On the other hand, if a party enters into an agreement, not as a result of a mistake of fact, but merely due to a lack of full knowledge of the facts, caused by the party's failure to exercise due diligence to ascertain them, there is no proper ground for relief.

Fawaz v. Fla. Polymers, 622 So.2d 492, 496 (Fla. 1st DCA 1993).¹

In other words, a stipulated final judgment may be set aside based on a mistake but not "when the mistake is the result of the party's own negligence and lack of foresight." Limehouse v. Smith, 797 So.2d 15, 17 (Fla. 4th DCA 2001). Indeed, "[i]t is never the role of the trial court to rewrite a contract to make it more reasonable for one of the parties or to relieve a party from what turns out to be a bad bargain." Feldman, 824 So.2d at 277 ; see also Smiles v. Young, 271 So.2d 798, 802–03 (Fla. 3d DCA 1973) (explaining that Florida Rule of Civil Procedure 1.540(b), which provides for relief from judgments based on mistake, "does not have as its purpose or intent the reopening of lawsuits to allow parties to state new claims or offer new evidence omitted by oversight or inadvertence. Nor does the rule allow a party to avoid the consequences of a decision to settle litigation even if the party regards the settlement as ‘bad’ in retrospect." (citations omitted)).

Where a case has been settled in mediation, the court should be particularly cautious about setting aside the settlement agreement based on a mistake. See Sponga v. Warro, 698 So.2d 621, 625 (Fla. 5th DCA 1997). This is because mediation is an alternative dispute resolution device, and the parties must be able to rely on the finality of the agreement reached. See id. "The decision to engage in mediation and to settle at mediation means that remedies and options otherwise available through the judicial system are foregone." Id.

Here, the Partnership entered into the settlement agreement and stipulations after two days of mediation. But after Maxwell successfully challenged Eagle's standing, the Partnership sought to set aside the stipulations. The Partnership argued that it was laboring under a mistake of fact at the time it entered the stipulations because it believed that Eagle had standing to pursue deficiency judgments. In support of its motion, the Partnership filed the affidavits of Robert L. Madden and William D. Drost. Madden stated that, "[a]t the time of the preparation and filing of the Stipulation, the Partnership was under the mistaken belief of fact with regard to the rights possessed by the Plaintiff relative to the entry of a deficiency judgment against it. ... But for the mistakes of fact as set forth above, the Partnership would not have entered into the Stipulation." Drost also stated on behalf of the Partnership that:

At all times material to the preparation of the Stipulation, T & A Family Partnership, Ltd. was under the mistaken belief that Eagle had standing to enforce the guaranty documents which allegedly form the basis for Eagle's

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