JOHN EDWARDS

v.

GRACE BELLAMY A/K/A GRACE MAXWELL

On or about March 28, 2018, Appellee Grace Bellamy/Maxwell (“Appellee”) filed a three-count Complaint against her Nephew, John Edward (“Appellant”) based upon his refusal to vacate the residence. Counts I and II for Eviction and Filing # 108915633 E-Filed 06/16/2020 11:13:17

In July 2018, the trial court ordered the parties to participate in an “in-house mediation.” The mediation resulted in the following fully executed “Stipulation and Order of Dismissal.” [*5] The Stipulated Settlement Agreement (“Agreement”) between the familial parties was clear and unambiguous. In the Agreement, Appellee had only two options:¹) retain the property—allowing Appellant to live there rent free, or²) sell the property. Appellee was under no obligation to sell the property, have the property appraised, list the property, or have the property sold to a third-party nonfamily member. Instead, the sale of the property was a condition that triggered each party’s obligation, to wit: that Appellant vacate the property and that Appellee disburse 15% net profit of the sale proceeds to Appellant. But for the familial relationship, this Agreement would not exist, as a property owner generally has no duty to pay an unlawful resident anything. Despite the language in the Agreement referring to Appellant as Defendant/Tenant and Appellee as Plaintiff/Landlord, there was never a landlord tenant relationship between the parties. The parties never entered into either a written or an oral lease agreement to pay rent.¹ Moreover, Appellant has never tendered rent to Appellee.

LEGAL ANALYSIS

Florida’s public policy “highly favors settlement agreements,” and courts should “enforce them whenever possible.” Hernandez v. Gil, 958 So. 2d 390, 391 (Fla. 3d DCA 2007) (quoting Sun Microsystems of Cal., Inc. v. Eng’g & Mfg. Sys., [*6] Cal., 682 So. 2d 219, 220 (Fla. 3d DCA 1996)); Robbie v. City of Miami, 469 So. 2d 1384, 1385 (Fla. 1985). Settlement agreements are governed by contract law. Id. The interpretation of a contract involves a pure question of law. All Seasons Condominium Ass’n, Inc. v. Patrician Hotel, LLC, 274 So. 3d 438, 445 (Fla. 3d DCA 2019). Under Florida law, “‘[t]he actual language used in the contract is the best evidence of the intent of the parties, and the plain meaning of that language controls.’” Wells v. Wells, 239 So. 3d 179, 181 (Fla. 2d DCA 2018) (quoting Ebanks v. Ebanks, 198 So. 3d 712, 715 (Fla. 2d DCA 2016). “In interpreting a contract, ‘the words used by the parties must be given their plain and ordinary meaning.’” Aristech Acrylics, LLC v. Lars, LLC, 116 So. 3d 542, 544 (Fla. 3d DCA 2013) (quoting Beans v. Chohonis, 740 So. 2d 65, 67 (Fla. 3d DCA 1999)). As the Third District Court of Appeal explains: We begin with the longstanding principle that contracts “must be construed according to their plain language.” St. Johns Inv. Mgmt. Co. v. Albaneze, 22 So. 3d 728, 731 (Fla. 1st DCA 2009). Ambiguity exists only when contractual language “is susceptible to more than one reasonable interpretation.” Penzer v. Transp. Ins. Co., 29 So. 3d 1000, 1005 (Fla. 2010). But “[a] true ambiguity does not exist [in a contract] merely because [the] contract can possibly be interpreted in more than one manner.” BKD Twenty–One Mgmt. Co. v. Delsordo, 127 So. 3d 527, 530 (Fla. 4th DCA 2012). “[I]n the absence of some ambiguity, the intent of the parties to a written contract must be ascertained from the words used in the contract, without resort to extrinsic evidence.” Real Estate Value Co., Inc. v. Carnival Corp., 92 So. 3d 255, 260 (Fla. 3d DCA 2012) (citation omitted); see also Walgreen Co. v. Habitat Dev. Corp., 655 So. 2d 164, 165 (Fla. 3d DCA 1995) (“When a contract is clear and unambiguous, the court is not at liberty to give the contract any meaning beyond that expressed.”). [*7] Dirico v. Redland Estates, Inc., 154 So. 3d 355, 357 (Fla. 3d DCA 2014). “Courts . . . are not authorized to rewrite clear and unambiguous contracts.” Andersen Window, Inc. v. Hochberg, 997 So. 2d 1212, 1214 (Fla. 3d DCA 2008); see also Hill v. Deering Bay Marina Ass’n, 985 So. 2d 1162, 1166 (Fla. 3d DCA 2008). Such contracts must be enforced as written. Id. In Anderson, a settlement agreement required testing windows that were to be installed, and a representative sample of the windows would be tested as determined by a named inspector. Andersen, 997 So. 2d at 1213. When one out of the three windows tested leaked, the petitioners demanded that the respondent test “all of the windows” to determine the problem and correct the deficiency. Id. The trial court concluded that the testing of only three windows was insufficient, holding as “fair and adequate” a requirement to test an additional five percent of the windows. Id. The appellate court found that: “while the court below may have felt that it was better to test additional windows, that is not what the parties agreed to and is, therefore, outside the authority of the trial court to “enforce” the contract.” Id. at 1214. The terms of the Agreement in the present case are clear and unambiguous, and therefore, the trial court was correct in not including obligations not expressly stated in the Agreement. Similarly, in Hobus v. Crandall, 972 So. 2d 867, 868 (Fla. 2d DCA 2007), the former husband performed his obligation under a marital settlement agreement by selling the property to himself. The former wife then sought to impose additional [*8] obligations on the former husband that were not part of the settlement agreement, such as requiring him to sell the property to a third party, and to sell the property at a qualified appraised value. Id. at 868-869. The court held that these additional obligations were improper, as imposing them would amount to judicial revision of the marital settlement agreement. Id. at 869. As in Hobus, Appellant is asking the court to rewrite the Agreement to include terms that were not plainly stated or expressed in the Agreement. Id. The subject Agreement does not give Appellant any input into the amount of the sales price. Courts may not “include terms that were not plainly stated in the agreement.” Id. (citing Robinson v. Robinson, 788 So. 2d 1092 (Fla. 4th DCA 2001)). Contrary to the arguments made by Appellant, the Agreement’s requirements regarding retention of a realtor and the placement of a lockbox on the property, do not either expressly or impliedly include an obligation for Appellee to sell the property or any limitation on a sale price. Instead, it is the sale of the property which triggered Appellee’s obligation to pay 15 percent of the net profit from the sale. Further, Appellant was not required to move out or pay rent unless this triggering condition occurred. Appellant, realizing that the Agreement did not include express terms requiring a sale or a minimum sale price, now seeks to have the Court rescue him. However, as stated in Hobus, “courts cannot rescue parties from the unintended [*9] consequences of knowingly made, and otherwise binding, contractual obligations.” Hobus, 972 So. 2d at 870. Appellant contends that the trial court erred in not considering the implied covenant of good faith and fair dealing implied in the Agreement. Although it is true that an implied covenant of good faith and fair dealing exists in virtually every contractual relationship, it is not applicable in this case. See Sepe v. City of Safety Harbor, 761 So. 2d 1182, 1184 (Fla. 2d DCA 2000); see also Restatement (Second) of Contracts § 205 (1981). “Because the implied covenant is not a stated contractual term, to operate it attaches to the performance of a specific or express contractual provision.” Snow v. Ruden, McClosky, Smith, Schuster & Russell, P.A., 896 So. 2d 787, 792 (Fla. 2d DCA 2005). “A duty of good faith must be anchored to the performance of an express contractual obligation.” Dep’t of Revenue v. Gen. Motors LLC., 104 So. 3d 1191, 1197 (Fla. 1st DCA 2012) (quoting Flagship Resort Dev. Corp. v. Interval Int'l, Inc., 28 So. 3d 915, 924 (Fla. 3d DCA 2010)) (internal quotations omitted). “A duty of good faith must ‘relate to the performance of an express term of the contract and is not an abstract and independent term of a contract which may be asserted as a source of breach when all other terms have been performed pursuant to the contract requirements.’” QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass'n, Inc., 94 So. 3d 541, 548 (Fla. 2012) (citing Ins. Concepts & Design, Inc. v. Healthplan Servs., Inc., 785 So. 2d 1232, 1234 (Fla. 4th DCA [*10] 2001)) (emphasis added). Since there is no express provision in the subject Agreement obligating Appellee to sell the property or imposing a limitation on the sale price,² Appellant’s argument regarding an implied covenant of good faith and fair dealing must fail.³ Accordingly, the decision of the trial court is AFFIRMED. TRAWICK, J., concurs.

3 In appropriate circumstances, the implied covenant of good faith is described as a “‘gap filling default rule’ which comes into play ‘when a question is not resolved by the terms of the contract or when one party has the power to make a discretionary decision without defined standards.’” Speedway SuperAmerica, LLC v. Tropic Enterprises, Inc., 966 So. 2d 1, 3 (Fla. 2d DCA 2007) (quoting Publix Super Markets, Inc. v. Wilder Corp. of Del., 876 So. 2d 652, 654 (Fla. 2d DCA 2004)); see also Cox v. CSX Intermodal, Inc., 732 So. 2d 1092, 1097 (Fla. 1st DCA 1999). Appellant claims that the implied duty of good faith should be invoked under the application of Appellee’s exercise of sole discretion in determining the sales price. We do not believe that Speedway is applicable here. Under the Agreement, Appellant lived at the property rent free. Appellee had unfettered discretion in either allowing Appellant to remain at the property or to sell the property whenever she chose and without any limitation on the amount of a sale. Appellant freely accepted this arrangement. Under these circumstances there is no need for “defined standards” in the exercise of Appellee’s discretion through an implied covenant of good faith.

[*11] REBULL, J. (dissenting) A hollow promise is one “lacking in real value, sincerity, or substance.”⁴ The law presumes that all contractual terms and promises are there for a reason, and should be given meaning and effect. The law therefore requires that when someone promises to do something in a contract, that they perform that promise in good faith and that they deal fairly with the person to whom the promise was made. The law does not, in other words, sanction hollow promises.

Because Ms. Bellamy did not perform in good faith her promise to pay 15% of the sales price of disputed real property to Mr. Edwards, I would reverse the final judgment appealed.

I.

The record on appeal reflects the following allegations made by the parties in this family dispute over a residential property located in the Coconut Grove neighborhood of the City of Miami. John Edwards lived in the property his entire life, for over 35 years. He lived there with his mother and maternal grandmother, Ola Lee Edwards. Mr. Edwards believed that his grandmother was the sole owner of the property.

[*12] In 1979, however, Ms. Edwards had quit claimed the property from herself as sole owner, to herself and her daughter, Grace Maxwell, as joint tenants with right of survivorship. Grace Maxwell (also known as Grace Bellamy) is Mr. Edwards’ maternal aunt. Ola Lee Edwards and Grace Maxwell, in 1987, quit claimed the property to Ms. Edwards as a life estate, and to Ms. Maxwell as remainderman.

Ms. Edwards passed away in December of 2017, at the age of 105. This left Ms. Bellamy as the sole record owner of the property. In March of 2018 Ms. Bellamy filed this action against Mr. Edwards (and anyone else in the property), seeking exclusive possession of the property and to remove Mr. Edwards. In his response to the complaint, Mr. Edwards alleged that he made or contributed to all payments of real estate taxes for the property, and that he paid other bills and costs related to the maintenance and upkeep of the home. He alleged that he had an interest in the property.⁵ In July of 2018, the lower court ordered the parties to participate in an “inhouse mediation” at the courthouse with a mediator provided by the court system.

For example, the majority finds that Mr. Edwards “had no vested interest in the property . . . .” This is directly contrary to Mr. Edwards’ allegations that he paid for the maintenance and upkeep of the property, including real estate taxes. Because this case settled, no findings have ever been made at trial regarding the nature of Mr. Edwards’ alleged interest in the property. [*13] That mediation resulted in the following fully executed “Stipulation and Order of Dismissal,” which I reprint in full: [*15] Under the settlement stipulation, Ms. Bellamy delivered a HUD Settlement Statement to Mr. Edwards, reflecting her intention to sell the property to her son for $200,000. In response to what he deemed to be a sales price which was indisputably below market value and therefore a breach of the settlement stipulation, Mr. Edwards filed a motion to enforce the stipulation, and attached a copy of the 2018 “Assessed value” from the Miami-Dade County Tax Collector, which assessed the value of the property at $429,019. Mr. Edwards argued, among other things, that the stipulation contemplated a sale of the property for market value. Ms. Bellamy filed her own motion against Mr. Edwards for what she argued was his noncompliance with the settlement stipulation.

On February 14, 2019, the trial court conducted an evidentiary hearing on both motions. Ms. Bellamy pertinently testified that she consulted with a realtor to determine the value of the property. She determined that it was worth at least $100,000 more than the $200,000 price to which she had agreed to sell it to her son. She further testified that she wanted to keep the property in her family, and not sell it to a stranger. Mr. Edwards testified that developers had asked him about the property and expressed interest in buying it for $750,000. He also presented the testimony of a licensed real estate broker who valued the property at $650,000, based on his examination of comparable properties sold in the neighborhood. [*16] The trial court denied Mr. Edwards’ motion, and granted Ms. Bellamy’s. In its final judgment, the court found that competent counsel represented Mr. Edwards, who “could have included specific language regarding the exact terms of sale in the Stipulation of Settlement, but failed to do so. The Stipulation is clear and unambiguous as to Defendant's entitlement, and no language exists requiring the parties to agree on a sale price, which the Defendant is now baselessly contesting.” The court further ruled as follows: The Court accepted as true the Defendant's testimony that the Stipulation was entered into freely and voluntarily, without coercion or duress. Defendant testified that he believed at the time of the Stipulation that the property was exceptionally valuable, despite entry into an agreement that lacked any terms regarding sale price.

The Court further finds that to the extent the Stipulation of Settlement included terms relating to the retention of a realtor and the placement of a lockbox on the subject property, same does not limit the Plaintiff with regard to the selling price of the subject property.

(emphasis added).

The lower court entered final judgment in favor of Ms. Bellamy and against Mr. Edwards. Mr. Edwards now appeals that final judgment, along with the denial of his motion for rehearing.

II.

On appeal, Mr. Edwards argues that Ms. Bellamy’s intention to pay him 15 percent of the net profit from the sale of the property, based on a below-market [*17] sale price of $200,000, is a breach of the implied covenant of good faith and fair dealing which is a part of the settlement stipulation. Ms. Bellamy argues, on the other hand, that because there is no requirement in the stipulation that the property ever be sold, there can therefore be no implied requirement that the property be sold at fair market value. She argues alternatively that even if the implied covenant applies, her decision to sell the property to her son for $200,000 does not violate it.

A stipulation is a contract, subject to the supervision of the court. See generally Smith v. Smith, 107 So. 257, 260 (Fla. 1925) (“A stipulation concerning the proceedings in a pending cause is an obligation unlike ordinary contracts between parties not in court, since no consideration is necessary to its validity, no mutuality is required, it may bind those incapable of binding themselves out of court, and it is subject to the supervision of the court.”); 2A Fla. Jur 2d Agreed Case and Stipulations § 5 (March 2020 Update).

Like the stipulation we are called upon to interpret in this case, a stipulation settling litigation is especially favored. The Third District Court of Appeal holds that it: is the policy of this state to encourage settlements and enforce them whenever it is possible to do so. See Robbie v. City of Miami, 469 So. 2d 1384, 1385 (Fla.1985) (finding that “settlements are highly favored and will be enforced whenever possible”); Hernandez v. Gil, 958 So. 2d 390, 391 (Fla. 3d DCA 2007) (same). Accordingly, “[i]t is fundamental that ‘[a] stipulation properly entered into and relating to a matter upon which it is appropriate to stipulate is binding upon the parties and upon the Court.’ ” Dorson v. Dorson, 393 So. 2d 632, 633 [*18] (Fla. 4th DCA 1981) (quoting Gunn Plumbing, Inc. v. Dania Bank, 252 So. 2d 1, 4 (Fla.1971)).

Antar v. Seamiles, LLC, 994 So. 2d 439, 442 (Fla. 3d DCA 2008).

We are called upon to interpret the stipulation in this case, and to apply it to the facts presented below. In so doing, we use the same interpretive methods which are applied to contracts. We conduct a de novo review of a trial court's interpretation of a written contract as a question of law “provided that the language is clear and unambiguous and free of conflicting inferences.” Ciklin Lubitz Martens & O'Connell v. Casey, 199 So. 3d 309, 310 (Fla. 4th DCA 2016) (quoting Commercial Capital Res., LLC v. Giovannetti, 955 So. 2d 1151, 1153 (Fla. 3d DCA 2007)). Pretrial stipulations are interpreted using the same principles for interpreting written contracts. See McGoey v. State, 736 So. 2d 31, 34 (Fla. 3d DCA 1999) (citing contract law and explaining that the essence of a pretrial stipulation is “an agreement between the parties” requiring mutual assent).

* * * “When construing stipulations, a court should attempt to interpret it in line with the apparent intent of the parties.” Utopia Provider Sys., Inc. v. Pro-Med Clinical Sys., LLC, 196 So. 3d 557, 561 (Fla. 4th DCA 2016). As explained in Travelers Insurance Co. v. VES Service Co., 576 So. 2d 1349 (Fla. 1st DCA 1991):

A stipulation ... must be carefully examined to determine whether the language used actually discloses a clear, positive, and definite stipulated fact. The statement should not be vague or ambiguous. Nevertheless, it should receive a construction in harmony with the apparent intention of the parties. It is not to be construed technically, but rather in accordance with its spirit, in furtherance of justice, in the light of the circumstances surrounding the parties, and in view of the result that they were attempting to accomplish. 2 Fla. Jur. 2d, Agreed Case and [*19] Stipulations, § 6; see Federal Land Bank of Columbia v. Brooks, 139 Fla. 506, 190 So. 737 (Fla. 1939).

Id. at 1350 (alteration in original)(emphasis added).

Wiener v. The Country Club at Woodfield, Inc., 254 So. 3d 488, 491 (Fla. 4th DCA 2018).

The Florida Standard Jury Instructions for Contract and Business Cases require that a contract be construed as a whole, and that every provision in a contract be given meaning and effect. 416.17 INTERPRETATION — CONSTRUCTION OF CONTRACT AS A WHOLE In deciding what the disputed term(s) of the contract mean, you should consider the whole contract, not just isolated parts. You should use each part to help you interpret the others, so that all the parts make sense when taken together. SOURCES AND AUTHORITIES FOR 416.17