Gustafsson v. Aid Auto Brokers, Inc.

Citations: 212 So. 3d 405; 2017 WL 362579; 2017 Fla. App. LEXIS 767Docket: No. 4D15-1951

Court: District Court of Appeal of Florida; January 24, 2017; Florida; State Appellate Court

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Plaintiffs Per Jonas Ingvar Gustafsson and Tressa Stiles seek review of three court orders: 1) an amended order enforcing a Mediated Settlement Agreement (MSA) that found Great American Insurance (GAI) liable for the plaintiffs’ attorney’s fees; 2) an order limiting GAI’s liability for fees to the $25,000 surety bond issued to another defendant; and 3) a final order directing GAI to pay the plaintiffs $25,000. The plaintiffs argue the trial court erred in limiting GAI’s liability under the MSA to the surety bond amount. In cross-appeal, GAI contends it is not liable for attorney’s fees under the MSA. The court agrees with GAI's position, which is deemed dispositive, and reverses the orders on appeal, instructing the trial court to deny the plaintiffs' motion to enforce the MSA.

The background involves the plaintiffs purchasing a used car from Aid Auto and later seeking to rescind the sale due to alleged fraudulent concealment of the vehicle's condition. They demanded a refund from GAI, which had issued a $25,000 surety bond to Aid Auto. The plaintiffs filed suit against Aid Auto, GAI, and Ally Financial, alleging violations of Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA), fraud, and seeking a declaratory judgment against GAI. They sought attorney’s fees from Aid Auto and Ally Financial under Chapter 501, Florida Statutes, but requested fees from GAI under section 627.428.

The parties settled, entering an MSA that included returning the vehicle, canceling the sales contract, a $20,000 payment to the plaintiffs, and a mutual release. The MSA stipulated attorney’s fees would be awarded only under FDUTPA, with a provision for fee determination by the court if the parties could not agree. During a fee hearing, plaintiffs’ counsel clarified they were not seeking fees from GAI. After GAI was deemed liable under the MSA, it was limited to the $25,000 bond amount, leading to the appeal and cross-appeal.

The standard of review for a trial court's contract interpretation is de novo when the contract language is clear and unambiguous. Settlement agreements are treated as contracts and interpreted based on contract law principles, emphasizing the plain and ordinary meaning of terms. A preferred interpretation is one that gives reasonable meaning to all contract provisions, avoiding any that render parts useless. Courts are not permitted to rewrite contracts or infer meanings not present in the text. For clear and unambiguous settlement agreements, the intent of the parties must be derived solely from the document itself.

The case examines whether GAI is liable for plaintiffs' attorney’s fees under the Master Settlement Agreement (MSA). The MSA explicitly limits the plaintiffs' entitlement to attorney’s fees to those under Chapter 501 of the Florida Statutes, which does not apply to regulated entities like sureties. Thus, GAI has no obligation to pay these fees. The MSA's language further clarifies that only Aid Auto is responsible for attorney’s fees, and the plaintiffs did not allege entitlement against GAI under Chapter 501 but rather under section 627.428. The trial court's interpretation incorrectly redefined the agreement, neglecting the explicit limitation of attorney’s fees to Chapter 501 only, which was not intended as merely a calculation method for fees.

Plaintiffs are not entitled to attorney's fees from GAI under Chapter 501 due to their election to limit fee entitlement specifically to that statute, which does not apply to GAI. The phrase "we agree that" within the MSA merely indicates agreement on the plaintiffs being entitled to reasonable attorney’s fees pursuant only to Chapter 501, without imposing liability on GAI. Other MSA provisions using similar language did not create obligations for GAI, such as those concerning the return of a car or cancellation of a sales contract. The plaintiffs' claim that GAI's interpretation of the MSA is "absurd" is dismissed, as the MSA clearly states the plaintiffs would receive $20,000 in damages, establishing sufficient consideration for the agreement. Consequently, GAI is not obligated to pay the plaintiffs' attorney’s fees. The court reverses the cross-appeal, rendering the main appeal moot, and remands for the trial court to deny the plaintiffs’ motion to enforce the MSA. The plaintiffs' request for a trial on the merits against GAI is declined. The ruling aligns with the precedent set by Diamond Aircraft Industries, Inc. v. Horowitch regarding attorney's fees in FDUTPA claims.