Merco Group at Akoya v. General Computer Services , 237 So. 3d 1052 ( 2017 )

Third District Court of Appeal
State of Florida
Opinion filed November 29, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D16-1132
Lower Tribunal No. 06-26218
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Merco Group at Akoya, Inc.,
Appellant,
vs.
General Computer Services, Inc.,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Migna Sanchez-
Llorens, Judge.
Billbrough & Marks and Geoffrey B. Marks, for appellant.
Arthur J. Morburger; John C. Mullin, Jr., for appellee.
Before LAGOA, EMAS and SCALES, JJ.
EMAS, J.
INTRODUCTION
Merco Group at Akoya, Inc. (Merco Group), the defendant below, appeals
from a final judgment in favor of plaintiff, General Computer Services (GCS),
following a jury trial on damages only,1 on GCS’s claim for breach of contract.
We reverse and remand for a new trial, because the trial court’s construction of the
terms of the underlying contract resulted in erroneous evidentiary rulings and
prevented the jury from considering relevant evidence on the issue of damages.
FACTS AND BACKGROUND
The Akoya is a high-rise residential condominium that was completed in
2005. Merco Group at Akoya was the developer of the project. In 2003, GCS met
with Merco Group and advised that it had a computer system which would
increase the value of the Akoya property. The computer system would provide
internet cabling and software to allow communication between the condominium
units, front desk, valet parking, and other areas outside the building (such as
doctors, dry cleaners, cafeterias and other services). GCS’s computer system was
1 In an earlier appeal, Merco Group appealed the trial court’s order denying its
motion to vacate a default final judgment awarding damages to GCS. See Merco
Grp. at Akoya, Inc. v. Gen. Comput. Servs., 45 So. 3d 971 (Fla. 3d DCA 2010).
We affirmed the trial court’s order insofar as it denied the motion to vacate the
default judgment, but reversed that portion of the final judgment awarding
damages. We remanded for a trial on damages only, holding that the damages
claim was unliquidated and required a factual determination. Id.
2
called the BeCruising System. In September 2003, the parties entered into a
contract.
The written contract between the parties provides in pertinent part:
Contract
This service contract is entered by Merco Group (Client) and/or its
successors . . . and General Computer Services Inc. (GCS) . . . .
I - GCS will offer the followi ng products and/or services:
1) GCS will provide one computer system and the Becruising System
software for each unit subscribing to our Becruising System.
2) GCS will provide additional hardware required for the Becruising
System (i.e. System Components for Concierge service and Valet
Parking services). These two systems total $3000.00. Paid for by
the Client and/or its successors.
3) GCS will provide two printers required for the Concierge service
and Valet Parking services as a courtesy, at no cost to the Client
and/or its successors.
II - The Client will commit itself to the following points:
1) The Client and/or its successors will commit, thru its own sales
force and withi n its main showroom, to illustrate and sell
Becruising System to all owners and possible buyers.2
2) The Client and/or its successors will purchase any additional
hardware required for the Becruising System (i.e. System
Components for Concierge service and Valet Parking services).
2 Merco Group had already been selling condominium units prior to the date the
parties entered into this contract; therefore, the contract included sales of the
BeCruising System to existing condominium unit owners as well as prospective
buyers of condominium units.
3
This may include any hardware items needed by the Client and/or
its successors to implement the Becruising System and the
Becruising System Services (currently the Concierge service and
Valet Parking services, etc.). These two systems total $3000.00.
Paid for by the Client and/or its successors before installation.
3) The price per system for each computer with the Becruising
System software installed is $3900.00 per unit, payable to GCS.
The Client and/or its successors, and/or the Salesperson, will
collect, on beha[lf] of GCS, full payment from each owner at the
time of sale. Full payment from unit owners for each individual
system sold is due upon execution of sale by the Client and/ or its
successors, and/or the Client's Salesperson. Checks collected
from the Client and/or its successors, and/or the Client's
Salesperson for each sale are to be picked up by GCS daily.
III – Payment Form:
1) This contract will commence upon signing by both parties.
2) Client's Commissions: The Client and GCS agree that for each
complete Becruising System sold by the Client and/or its
successors and the Client's sales force, to unit owners and new
buyers, a sales commission of $1000.00. Commissions will be
paid each month for systems sold the previous month.
3) Salesperson's Commission: The Client and GCS agree that for
each complete Becruising System sold by the Client and/or its
successors and the Client's sales force, to unit owners and new
buyers, a sales commission $200.00 to the Salesperson.
Commissions will be paid each month for systems sold the
previous month.
4) Cancelled Sales: Any commissions earned on sales voided by
individual unit owners will be credited back to GCS. If
commissions have been paid on a voided sale, all commissions for
said sale must be returned to GCS by the Client and/or its
successors, and the Client's Salesperson.
4
IV - General Agreement:
1) Any extra cost for upgrades required by the individual unit
owners, will be charged directly to each owner at the prices
negotiated between GCS and each individ ual owner based on each
owner's own requirements. Said upgrades will only be done under a
signed contract and is to be paid for before any work is
commenced.
(Italics and underlining added.)
One month later, the parties executed an addendum to the contract:
Contract Addendum
This is an addendum to the contract signed on September 10, 2003
between Merco Group at Akoya Inc. (the client). . . and General
Computer Services Inc. (GCS) . . . .
Both parts [sic] agree as follow:
1. Property: The equipment Tablet PC Serial Number
OP024600121 View Sonic Tablet PC v l 100 model
vsmw24888-lw (from now on the equipment) is a property
of General Computer Services Inc.
2. Location: The equipments [sic] will be in the sales center in
the trailer to be seen by owners of the apartments of
Akoya Buildings and new buyers.
3. Responsibility:
a. The equipment will be under the protection of
the client and if the equipment is damaged or
lost the client will pay General Computer
Services Inc $2900.00.
b. Only General Computer Services Inc. will be
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able to use the equipment to make
demonstrations in other locations outside the
trailer.
c. The product cannot be taken out of the trailer
unless General Computer Services Inc. gives
written consent to Merco Group at Akoya Inc.
4. The client agrees to promote exclusively the BeCruising
System in the Akoya Building. This is an Information
System based on software that communicates the
apartments with the front desk, valet parking, and other
public areas of the building that can be included later in the
system and wi th other services outside the building wi th the
objective to serve the residents and the management of the
building. Also the BeCruising Systems can manage the
security camera system for the apartments and the building
certified by General Computer Services Inc.
(Italics and underline added.)
Prior to trial, the parties entered into a written stipulation, which Merco
Group sought to read to the jury: “Unit owners and potential purchasers . . . were
not obligated to purchase the BeCruising smart system from General Computer
Services, Inc.” Nonetheless, at trial, GCS argued, and the trial court agreed, that
under the terms of the parties’ contract, Merco Group was obligated to sell the
GCS computer system, at a cost of $3900 per system, to every individual
purchasing a condominium unit at Akoya (as well as to existing condominium unit
owners).
Accordingly, although GCS voluntarily entered into the pre-trial stipulation,
it objected when Merco Group sought to introduce the stipulation into evidence
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during trial.3 The trial court sustained the objection, finding that such evidence
would merely confuse the jury because whether unit owners were obligated to buy
the system, and whether Merco Group in fact sold any of the computer systems,
was irrelevant to the question of damages suffered by GCS. The trial court also
excluded or otherwise limited certain testimony from Merco Group’s witnesses
regarding how many computer systems were actually sold to unit owners.
Thus, GCS contended at trial the damages to which it was entitled under the
contract could be calculated in rather straightforward fashion by multiplying the
number of condominium units by the cost of each computer system. The jury
returned a verdict in favor of GCS on the breach of contract claim and awarded
damages in the amount of $1,360,800.4
ANALYSIS
The construction of the terms of a contract is subject to de novo review. See
NCP Lake Power, Inc. v. Fla. Power Corp., 781 So. 2d 531, 536 (Fla. 5th DCA
2001) (holding: “The interpretation of a contract is a question of law and,
3 See Fla. Std. J. Inst. (Civ.) 301.1d. (the following standard jury instruction is to
be given to the jury before a stipulation is read into evidence: “Members of the
jury, the parties have agreed to certain facts. You must accept these facts as true.
(Read the agreed facts).”
4 There was some dispute regarding the actual number of condominium units and
whether certain “cabana units,” or only residential condominium units, should be
included in the calculation of damages. Also, there were some setoffs (e.g., the
“commissions” payable for the sale of each unit), as well as other payments
previously made by Merco Group to GCS.
7
therefore, we are not bound by the conclusions reached by the trial court regarding
construction of the [c]ontract”). Evidentiary rulings are reviewed under an abuse
of discretion standard. Linde v. Linde, 199 So. 3d 1102, 1104 (Fla. 3d DCA 2016).
We read the contract and the addendum together, and construe the contract
as a whole in determining the agreement of the parties. See Therrien v. Larkins,
959 So. 2d 365, 367 (Fla. 5th DCA 2007). A review of this contract clearly
illustrates that Merco Group did not guarantee the sale of a computer system to
every individual condominium unit owner. Rather, reading the contract and
contract addendum as a whole, it is plain that Merco Group agreed to exclusively
promote GCS’ BeCruising System and use its best efforts in selling that system to
each individual purchasing a condominium unit at Akoya. Were we to construe
the contract as urged by GCS, Merco Group would in essence be obligated to pay
GCS for a BeCruising System for each condominium unit, regardless of whether
the unit owner actually bought the system. If this were so, it would require us to
ignore in the contract the provision regarding “Cancelled Sales” (section III (4)),
which provides:
Cancelled Sales: Any commissions earned on sales voided by
individual unit owners will be credited back to GCS. If
commissions have been paid on a voided sale, all commissions for
said sale must be returned to GCS by the Client and/or its
successors, and the Client's Salesperson.
8
In addition, under the construction urged by GCS, and adopted by the trial
court, the provision in section III (2) that a $1000 commission would be paid “ for
each complete Becruising System sold by the Client” and that such commissions
are to “be paid each month for systems sold the previous month,” would be
superfluous.
Our review of these and other provisions in the contract leads us to conclude
that Merco Group did not agree to guarantee the sale of, or be responsible to pay
GCS for, a BeCruising System for every individual who purchased a condominium
unit5 regardless of whether that condominium owner actually bought the
BeCruising System.
Given our construction of these terms of the contract, it necessarily follows
that the pretrial stipulation was relevant to the question of damages allegedly
suffered by GCS as a result of the breach.6 The trial court abused its discretion in
5 As indicated at note 2 supra, Merco Group had already been selling
condominium units prior to the date the parties entered into this contract; under
GCS’s proposed construction of the contract, Merco Group would also have been
obligated to pay GCS for each (unsold) BeCruising System for these existing unit
owners as well.
6 Merco Group invites this court to reach the question of what the proper measure
of damages should be, and further urges us to hold that the case should have been
tried upon a damages theory of lost profits. We decline the invitation, as we need
not and therefore do not, reach this question, but instead limit our holding to the
construction of that portion of the contract necessary to our decision, and address
only the erroneous evidentiary rulings that flowed from the trial court’s
construction of the contract.
9
excluding the stipulation that unit owners and potential buyers were not obligated
to purchase the BeCruising smart system from General Computer Services,7 and in
limiting, as irrelevant, the testimony of Merco Group’s witnesses regarding the
number of sales of the BeCruising System.
We therefore reverse the judgment and remand for a new trial on damages.8
REVERSED AND REMANDED.
7 As a matter of policy, the law encourages and upholds stipulations, which serve
to narrow the issues and expedite the resolution of disputes. A stipulation properly
entered into, and relating to a matter to which it is appropriate to stipulate, is
binding upon the parties and should be strictly enforced by the court. LPI/Key
West Assocs., Ltd. v. Beachcomber Jewelers, Inc., 77 So. 3d 852 (Fla. 3d DCA
2012). A party seeking relief from a pretrial stipulation must make a reasonable
motion to withdraw the stipulation supported by a showing of good cause. Id. at
855; Lopez v. Dublin, 489 So. 2d 805, 807 n. 3 (Fla. 3d DCA 1986).
8 We note in passing that GCS had also sought damages on a quantum meruit
theory, and the jury returned a verdict of $699,611 in favor of GCS on that claim
as well. Posttrial, Merco Group filed a motion for remittitur of the quantum meruit
award. The trial court reduced the amount of that award, but Merco Group
objected to the amount of the remitted award, and the trial court granted a new trial
on damages as to the quantum meruit claim. Thereafter (and before the notice of
appeal was filed with this court), GCS voluntarily dismissed the quantum meruit
claim. Therefore, on remand, only the count for breach of contract remains
pending for a new trial on damages.
10