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Goldblatt v. C.P. Motion, Inc.

Florida Court of Appeal, Third District

December 28, 2011

Richard GOLDBLATT, individually and Valerie Goldblatt, individually, Appellants,
v.
C.P. MOTION, INC., a Florida Corporation, Appellee.

Page 799

Kasowitz, Benson, Torres & Friedman, LLP, and Lawrence D. Silverman, Miami, and Sandra J. Millor; Gerald J. Houlihan, Miami, for appellants.

Carey Rodriguez Greenberg & Paul, LLP, and David P. Milian, Miami, and David M. Levine, for appellee.

Before WELLS, C.J., and SUAREZ, and FERNANDEZ, JJ.

FERNANDEZ, J.

Richard and Valerie Goldblatt appeal a final judgment awarding appellee C.P. Motion, Inc. $4,969,339. The Goldblatts maintain, in part, that the final judgment award is invalid, as it is the product of an unenforceable liquidated damages clause. We agree and therefore reverse on this basis. We affirm the final judgment in all other respects.

In November of 1999, Richard Goldblatt and Raymond Weisbein created C.P. Motion, a business that specializes in the distribution of a medical device used in the treatment of joint injuries. During the course of business, C.P. Motion, with Richard Goldblatt and Valerie Goldblatt as personal guarantors, entered into an agreement with Real Lease, Inc. whereby Real Lease agreed to lease medical equipment to C.P. Motion in exchange for monthly lease payments.

Raymond Weisbein and Richard Goldblatt terminated their business agreement in 2004. The parties subsequently negotiated and executed a settlement and release agreement. Pursuant to the agreement, C.P. Motion paid the Goldblatts $2.7 million in cash, paid $300,000 in periodic salary payments, and agreed to forgive $4 million in debt. C.P. Motion also promised to indemnify the Goldblatts from judgments and liabilities arising from their business relationship. In return, the Goldblatts agreed to relinquish any ownership interest in C.P. Motion. The Goldblatts also agreed to a five-year restrictive covenant, which restricted the Goldblatts from conducting any business that competed with C.P. Motion. In the event that the Goldblatts breached the restrictive covenant, the parties negotiated a liquidated damage sum of $250,000 per breach.

The parties subsequently breached the terms of the agreement. The Goldblatts claim that C.P. Motion breached when it failed to indemnify them against a lawsuit by Real Lease, one of C.P. Motion's creditors. C.P. Motion, on the other hand, claims that the Goldblatts breached the restrictive covenant when they solicited C.P. Motion's clients.

Both parties brought suit and subsequently filed cross motions for summary judgment. In his motion, Richard Goldblatt argued that the restrictive covenant was unenforceable as to its duration and that the liquidated damages clause was unenforceable as it amounted to an unconscionable penalty. C.P. Motion argued that the liquidated damages provision was enforceable as a matter of law. In her motion, Valerie Goldblatt argued that she should not be held liable for Richard Goldblatt's

Page 800

actions because she did not personally breach the restrictive covenant.

The trial court denied Richard Goldblatt's motion for summary judgment, holding that the liquidated damages clause was enforceable as a matter of law. The trial court granted C.P. Motion's motion for summary judgment as to liability and denied Valerie Goldblatt's motion for summary judgment. Following these rulings, C.P. Motion moved for summary judgment for damages under the liquidated damages clause. The trial court entered final judgment in the amount of $4,969,339 against the Goldblatts jointly and severally.

The entry of summary judgment in favor of the movant involves a question of law, subject to a de novo review on appeal. See Fayad v. Clarendon Nat'l Ins. Co., 899 So.2d 1082 (Fla.2005). To prevail on a motion for summary judgment, the movant must prove that there are no genuine issues of material fact. See Moore v. Morris, 475 So.2d 666, 668 (Fla.1985).

Chief among their issues on appeal, the Goldblatts challenge the enforceability of the liquidated damages clause in the settlement agreement. First, they argue that the liquidated damages clause is unenforceable because any damages that resulted from the contract breach were ascertainable at the time the contract was formed. Second, they argue that the liquidated damages clause results in nothing ...


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