Sound Around, Inc. v. Hialeah Last Mile Fund VII LLC
| Decision Date | 07 April 2023 |
| Docket Number | Civil Action 22-20652-Civ-Scola |
| Parties | Sound Around, Inc., Plaintiff, v. Hialeah Last Mile Fund VII LLC, and Hialeah Last Mile LLC, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
ORDER GRANTING IN PART AND DENYING IN PART THE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
This matter is before the Court on the Plaintiff Sound Around Inc.'s (“Sound Around”) motion for summary judgment. (ECF No. 74.) The Defendants Hialeah Last Mile Fund VII LLC (“Fund VII”) and Hialeah Last Mile LLC (“HLM”) (collectively, the “Defendants”) filed a response (Resp. in Opp'n, ECF No. 85) and Sound Around replied (Reply, ECF No. 95). After careful consideration of the parties' arguments, the relevant legal authorities, and the record the Court grants in part and denies in part Sound Around's motion for summary judgment. (Mot ECF No. 74.)
This matter arises from a failed agreement between Sound Around and the Defendants for the sale of the warehouse located at 6501 N.W. 37th Avenue, Miami, Florida (the “Property”).
In early 2021, Sound Around was looking to purchase a commercial warehouse in the Miami area when its broker, Hector Catano, contacted the Defendants' broker, Jake Zebede, regarding their sale of the Property. (Pl.'s Stmt. of Facts ¶¶ 9-10, ECF No. 75.) The Property had been listed for lease or sale sometime in 2020 by CBRE, the commercial real estate brokerage company for which Mr. Zebede worked. (Id. ¶¶ 5-8; Defs.' Stmt. of Facts ¶¶ 58, ECF No. 87.)
The parties eventually reached an agreement for purchase of the Property, together with certain renovations and improvements, for a total of $11,434,050. (Pl.'s Stmt. of Facts ¶ 16; Defs.' Stmt. of Facts ¶ 16.) Critically, however, although both sides had full knowledge that the Property was owned jointly by Fund VII and HLM, the final commercial contract for the sale and purchase of the Property (the “Purchase Agreement”) completely omits HLM. (Ex. F to Pl.'s Stmt. of Facts, ECF No. 75-6.)
Throughout the parties' negotiations, it appeared clear not only that Sound Around was purchasing the entire property, but also that both Defendants were on board with the transaction. For example, CBRE's marketing materials listed the entire property for sale, and Sound Around's March 11, 2021, Letter of Intent identifies both Fund VII and HLM as the Property's sellers. (Exs. C, E to Pl.'s Stmt. of Facts, ECF Nos. 75-3, 75-5.)[1]Indeed, around the time the Purchase Agreement was being finalized, it was HLM that took steps toward completing the renovations and improvements that would have been required to close the sale. (Pl.'s Stmt. of Facts ¶¶ 27-33; Defs.' Stmt. of Facts ¶¶ 27-33.)
Nonetheless, the deal eventually fell through, and by late 2021 Douglas O'Donnell (one of the Defendants' principals) had informed Mr. Catano that “Hialeah LM w[ould] not proceed under the Contract, which [they] [we]re [t]hereby terminating[.]” (See Ex. Q to Pl.'s Stmt. of Facts, ECF No. 75-17.) In the instant lawsuit, Sound Around seeks to enforce the Purchase Agreement against both Defendants. To that end, it now moves for summary judgment on its claims for reformation of the contract to include HLM (Count One), breach of contract (Count Two), and anticipatory breach of contract (Count Three).
Summary judgment is proper if following discovery, the pleadings, depositions, answers to interrogatories, affidavits and admissions on file show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Fed.R.Civ.P. 56. “An issue of fact is ‘material' if, under the applicable substantive law, it might affect the outcome of the case.” Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir.2004). “An issue of fact is ‘genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party.” Id. at 1260. All the evidence and factual inferences reasonably drawn from the evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1280 (11th Cir. 2004).
Once a party properly makes a summary judgment motion by demonstrating the absence of a genuine issue of material fact, whether or not accompanied by affidavits, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories and admissions on file, and designate specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 323-24. The nonmovant's evidence must be significantly probative to support the claims. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The Court will not weigh the evidence or make findings of fact. Anderson, 477 U.S. at 249; Morrison v. Amway Corp., 323 F.3d 920, 924 (11th Cir. 2003). Rather, the Court's role is limited to deciding whether there is sufficient evidence upon which a reasonable juror could find for the nonmoving party. Id.
The primary issues presented in this case are whether the Purchase Agreement can be reformed to add HLM as a seller signatory, whether the Defendants breached the Purchase Agreement, and whether Sound Around is entitled to specific performance and other relief. As noted, the Court grants in part and denies in part Sound Around's motion for summary judgment.
While the record shows that the parties committed a mutual mistake in omitting HLM from the Agreement, a genuine issue of fact remains as to whether Sound Around was grossly negligent such it is not entitled to reformation (Count One). Because of this, the Court cannot grant Sound Around's request for specific performance at this time.
Moreover, while the evidence establishes that the Purchase Agreement was anticipatorily breached (Count Three), there remains a genuine issue of fact regarding Sound Around's breach of contract claim (Count Two).
Preliminarily, though, the Court addresses the Defendants' argument that Sound Around's motion for summary judgment should be denied as premature. The Defendants raise two points: first, they state that, because Sound Around moved for summary judgment before they answered the second amended complaint, its motion does not address their affirmative defenses; second, they point out that the second amended complaint was filed after discovery was closed, so that they never had an opportunity to conduct discovery on the new reformation claim contained therein. The Court is not convinced.
To begin, the Defendants are not correct that summary judgment is inappropriate merely because Sound Around did not address their affirmative defenses in its opening brief. It is well settled that “[w]hen a defendant raises an affirmative defense in opposition to summary judgment, he ‘has the initial burden of making a showing that the [affirmative] defense is applicable.'” Great Am. Ins. Co. v. Mueller, No. 21-12039, 2022 U.S. App. LEXIS 18154, at *12 (11th Cir. June 30, 2022) (quoting Blue Cross & Blue Shield of Ala. v. Weitz, 913 F.2d 1544, 1552 (11th Cir. 1990)). “In other words, the burden is on the defendant to adduce evidence supporting an affirmative defense, not upon the movant to negate its existence.” Id. (quoting Johnson v. Bd. of Regents of Univ. of Ga., 263 F.3d 1234, 1264 (11th Cir. 2001)). “The practical import of this legal framework is that the nonmoving party may not simply depend upon the mere allegations or defenses in his answer to counter a motion for summary judgment.” McDonough v. Greer, No. CV 14-61526-CIV, 2015 WL 12532634, at *4 (S.D. Fla. Sept. 18, 2015) (Scola, J.) (citing Int'l Sch. Servs., Inc. v. AAUG Ins. Co., No. 10-62115-CIV, 2012 WL 5635590, at *8 (S.D. Fla. Nov. 15, 2012) (Altonaga, J.)).
The Defendants' cases to the contrary are all distinguishable. For example, in Stillman v. Travelers Ins. Co., 88 F.3d 911, 912 (11th Cir. 1996), the district court had granted final judgment in favor of the plaintiff even though the latter had only moved for partial summary judgment on one of the defendant's seventeen affirmative defenses. There, “[t]he parties themselves . . . recognized the partial nature of their cross-motions for summary judgment[,]” and the Eleventh Circuit vacated the district court's final judgment only to the extent it appeared to resolve issues other than those the parties had moved on. Id. at 913-14. To the contrary, here, Sound Around is seeking summary judgment on all its claims. Accordingly, the Defendants “bear[] the initial burden of showing that the[ir] affirmative defense [are] applicable[,]” and it is of no consequence that Sound Around did not address them when first moving for summary judgment. United States v. Tubbs, No. 19-CV-80553-Civ, 2019 U.S. Dist. LEXIS 204494, at *4 (S.D. Fla. Nov. 22, 2019) (Middlebrooks, J.); see also United States v. Kafleur, 168 Fed.Appx. 322, 327 (11th Cir. 2006) ().
Furthermore the Defendants' argument that summary judgment is premature because they have been unable to conduct discovery on Sound Around's reformation claim is also unavailing. The Defendants previously filed a motion for limited reopening of discovery on the reformation claim pursuant to Fed.R.Civ.P. 16(b), which the Court denied. (See ECF Nos. 79, 84.) In so doing, the Court explained that “[t]he Defendants have...
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