Okeechobee Resorts, L.L.C. v. E Z Cash Pawn, Inc.

• Decision Date: 03 September 2014
• Docket Number: No. 4D13–2674.,4D13–2674.
• Citation: 145 So.3d 989
• Parties: OKEECHOBEE RESORTS, L.L.C., Appellant, v. E Z CASH PAWN, INC., Appellee.
• Court: Florida District Court of Appeals

145 So.3d 989

OKEECHOBEE RESORTS, L.L.C., Appellant,

v.E Z CASH PAWN, INC., Appellee.

No. 4D13–2674.

District Court of Appeal of Florida, Fourth District.

Sept. 3, 2014.

Tara A. Finnigan of Tara A. Finnigan P.A., West Palm Beach, for appellant.

Ronald M. Gaché and Scott A. Simon of Shapiro, Fishman & Gaché, LLP, Boca Raton, for appellee.

HANZMAN, MICHAEL, Associate Judge.

Introduction

This case—like many preceding it—involves claims seeking to enforce an alleged oral modification of a written contract which expressly prohibits any parol alteration of its terms and conditions. The transaction at issue (a pawn contract) also is subject to the “Florida Pawnbroking Act,” which in pertinent part requires that extensions of a default date (the type of modification appellant sought to enforce here) be “evidenced by a written memorandum.” § 539.001(11)(b), Fla. Stat. (2011). Given this legislative edict and the bargain struck by the parties, the trial court granted appellee's motion for summary judgment and thereafter entered Final Judgment in its favor. Appellant claims error, asserting: (a) that neither the contract nor the statute in fact requires that all modifications be in writing; and (b) that its “detrimental reliance” upon appellee's oral promises to extend the default date enables it to side-step any contractual or statutory impediment to enforcement of the alleged modification. We affirm.

Facts

Appellee (the defendant below) E Z Cash Pawn, Inc. is a pawnbroker licensed under the Florida Pawnbroking Act codified in Chapter 539. On April 15, 2011, appellant (the plaintiff below) Okeechobee Resorts, LLC secured a loan from E Z Cash and pledged a Chevrolet truck as collateral. The parties' written agreement contained a maturity date of May 15, 2011, and a default date of June 14, 2011. In the event of default, E Z Cash was permitted to sell the truck.

The contract contained three other clauses relevant to our disposition. It first provided that any pawn “may be extended upon mutual agreement of the parties.” Though this particular clause did not require that any such extension be in writing, the contract went on to recite that: (a) “[n]o oral representation shall in any way change or modify these written conditions and such oral representation shall in no way be binding upon the issuer of this pawn ticket”; and (b) “verbal agreements for additional days are non binding.” The parties agree that the contract's terms and conditions were never modified in writing.

Okeechobee failed to repay the loan prior to the written default date, and E Z Cash proceeded to sell the truck as authorized by the contract. Seven months later, Okeechobee brought suit based upon the allegation that E Z Cash had orally agreed to extend the default date; a promise Okeechobee allegedly relied upon to its detriment. Specifically, Okeechobee alleged that: (a) prior to the June 14 default date, the parties orally agreed to extend the pawn until June 24; (b) on June 23, the parties again orally agreed to extend the pawn until June 29; and (c) on June 28, the parties orally agreed to a final extension through July 5, 2011. Okeechobee claimed that in reliance on these oral extensions it sold other property in order to raise the funds needed to repay the loan. Okeechobee further alleged that it deposited sufficient funds into its attorney's trust account before expiration of the claimed July 5 deadline, and that when its lawyer attempted to pay off the loan, she was told the truck already had been sold.¹

Governing Law

The question of when a party may attempt to enforce an alleged oral modification of a written contract has no doubt been a much litigated subject. And while courts faced with such claims have arguably delivered a somewhat mixed message, a careful examination of precedent reveals that the issue is not particularly complex.

When a written contract is silent on the question of modification, or expressly permits modification—yet fails to specify that a writing is required—an oral modification is enforceable so long as it is not precluded by statute. See Schroeder v. Manceri, 893 So.2d 603, 606 (Fla. 4th DCA 2005) (oral extension of default date was enforceable as it was not required to be in writing by statute or terms of contract); The Race, Inc. v. Lake & River Recreational Props., Inc., 573 So.2d 409, 410–11 (Fla. 1st DCA 1991). In these two scenarios, no legislatively imposed public policy mandates that the modification be in writing, and the parties themselves have not bargained for such a requirement. As a result, the contract may be modified through a “subsequent agreement” or the parties' “subsequent conduct,” provided that the amendment is “supported by proper consideration.” St. Joe Corp. v. McIver, 875 So.2d 375, 381, 382 (Fla.2004).

The issue becomes slightly more complicated when a statute or the contract itself requires that any agreement (or modification) be in writing. In the former instance, the Legislature has decided, as a matter of public policy, to “intercept the frequency and success of actions based on nothing more than loose verbal statements or mere innuendos[,]” and thereby foreclose potentially fraudulent claims. Yates v. Ball, 132 Fla. 132, 181 So. 341, 344 (1937). In the latter instance, the parties themselves have contractually agreed to do exactly the same thing. They have bargained for predictability and certainty and have foreclosed (or at least attempted to foreclose) any chance of being subjected to litigation premised upon alleged oral modifications of their written document.

Contracts are voluntary undertakings, and contracting parties are free to bargain for—and specify—the terms and conditions of their agreement. That freedom is indeed a constitutionally protected right. Nw. Nat'l Life Ins. Co. v. Riggs, 203 U.S. 243, 252–53, 27 S.Ct. 126, 51 L.Ed. 168 (1906); Hoffman v. Boyd, 698 So.2d 346, 348 (Fla. 4th DCA 1997). Contracting parties are at liberty to address any issue they see fit, including the question of whether their agreement may be modified at all, and, if so, how. See, e.g., Atl. Beach Mgmt., Inc. v. Breakers of Fort Walton Beach Condos., Inc., 589 So.2d 315, 316 (Fla. 1st DCA 1991). When contracting parties elect to adopt a term or condition, including one addressing the question of modification, it is not the province of a court to second guess the wisdom of their bargain, or to relieve either party from the burden of that bargain by rewriting the document. See Pol v. Pol, 705 So.2d 51, 53 (Fla. 3d DCA 1997) (“[A] court cannot rewrite the clear and unambiguous terms of a voluntary contract.”); Int'l Expositions, Inc. v. City of Miami Beach, 274 So.2d 29, 30–31 (Fla. 3d DCA 1973) (“[C]ourts may not rewrite, alter, or add to the terms of a written agreement between the parties and may not substitute their judgment for that of the parties in order to relieve one from an alleged hardship of an improvident bargain.”). Rather, it is a court's duty to enforce the contract as plainly written. See Rybovich Boat Works, Inc. v. Atkins, 587 So.2d 519, 521–22 (Fla. 4th DCA 1991) (reversing trial court's refusal to give effect to an unambiguous “anti-waiver” clause contained in the parties' written contract).

So when a contract plainly provides that any modification must be in writing, all claims—however labeled—founded upon an alleged oral modification should generally be disposed of as a matter of law. The parties have dealt with the issue through a provision designed—and intended—to protect them against the risk of “being enmeshed in, and harassed by” protracted litigation based upon alleged oral modifications, Cohen v. Pullman Co., 243 F.2d 725, 729 (5th Cir.1957); LynkUs Commc's, Inc. v. WebMD Corp., 965 So.2d 1161 (Fla. 2d DCA 2007), and courts should in most cases do no more than enforce the contract as written.

The law of course is rarely so clear, and in Professional Insurance Corp. v. Cahill, 90 So.2d 916, 918 (Fla.1956), our Supreme Court held that even when an agreement expressly precludes oral modifications:

[a] written contract or agreement may be altered or modified by an oral agreement if the latter has been accepted and acted upon by the parties in such manner as would work a fraud on either party to refuse to enforce it.

The Cahill court did not elaborate on precisely what is required in order to prove that an alleged oral agreement had “been accepted and acted upon by the parties,” or under what circumstances a failure to enforce such a modification would “work a fraud.” Id. But Cahill involved a situation where the plaintiff alleged that an oral modification to his employment agreement required that he perform services not within the scope of the initial contract, that he in fact performed those services, and that the defendant accepted and benefited from that additional work (i.e., consideration not required by the initial contract). Id. at 917.

In the almost sixty years since Cahill was decided, our courts have repeatedly confronted claims grounded upon alleged oral modifications of contracts containing a so-called “no oral modification clause.” The vast majority of resulting appellate decisions have disposed of these cases by accurately reciting—and then proceeding to apply—the standard adopted in Cahill. See, e.g., J. Lynn Constr., Inc. v. Fairways at Boca Golf & Tennis Condo. Ass'n, 962 So.2d 928 (Fla. 4th DCA 2007); WSOS–FM, Inc. v. Hadden, 951 So.2d 61 (Fla. 5th DCA 2007); Blue Paper, Inc. v. Provost, 914 So.2d 1048 (Fla. 4th DCA 2005); Arvilla Motel, Inc. v. Shriver, 889 So.2d 887 (Fla. 2d DCA 2004); W.W. Contracting, Inc. v. Harrison, 779 So.2d 528 (Fla. 2d DCA 2000); Jupiter Square S.C. Assocs., Inc. v. Tomary, Inc., 571 So.2d 538 (Fla. 4th DCA 1990); King Partitions & Drywall, Inc. v. Donner Enters., Inc., 464 So.2d 715 (Fla. 4th DCA 1985); Commerce Nat'l Bank v. Van Denburgh, 252 So.2d 267 (Fla. 4th DCA 1971); Long Key Corp. v. Willis–Burch, Inc., ...