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Asset Management Holdings, LLC v. Assets Recovery Center Investments, LLC

Florida Court of Appeals, Second District

February 23, 2018

ASSET MANAGEMENT HOLDINGS, LLC, a/k/a AMH USA, LLC; and THIERRY CASSAGNOL, Appellants,
v.
ASSETS RECOVERY CENTER INVESTMENTS, LLC; 19-ASSET MANAGEMENT HOLDINGS, LLC; MIA FUNDING, LLC; 17-ASSET MANAGEMENT HOLDING, LLC; 16-ASSET MANAGEMENT HOLDINGS, LLC; 14-TP FUNDING, LLC; 12 ASSET MANAGEMENT HOLDINGS, LLC; 11 ASSET MANAGEMENT HOLDINGS, LLC; 10-ASSET MANAGEMENT HOLDINGS, LLC; 9-COMP LOAN, LLC; 6-MISPROPERTIES, LLC; 5-HOMECOM.LOANS, LLC; 4-TRADERS TRUST, LLC; 21 ASSET MANAGEMENT HOLDINGS, LLC; 3-STUDENT LOAN, LLC; 2 BANKING ONE FUNDING, LLC; 1, M, LLC, 1 M, INC.; JOHN OLSEN; and DANIEL COOSEMANS, Appellees.

         Appeals from the Circuit Court for Sarasota County; Stephen L. Dakan, Associate Senior Judge.

          John S. Jaffer, Sarasota, and Steele T. Williams of Steele T. Williams, P.A., Sarasota, for Appellants.

          Mark A. Levy of Brinkley Morgan, Ft. Lauderdale, for Appellees.

         BY ORDER OF THE COURT:

         The plaintiff entities' October 31, 2017, motion for rehearing is denied. The plaintiff entities' October 31, 2017, motion for clarification is granted to the extent that the prior opinion dated October 18, 2017, is withdrawn and the attached opinion is issued in its place. No further motions for rehearing will be entertained.

         I HEREBY CERTIFY THE FOREGOING IS A TRUE COPY OF THE ORIGINAL COURT ORDER.

          ROTHSTEIN-YOUAKIM, Judge.

         Defendants/Counterplaintiffs below, Asset Management Holdings, LLC, a/k/a AMH USA, LLC, and Thierry Cassagnol (collectively, AMH), appeal an amended final judgment awarding damages to Plaintiffs/Counterdefendants below, Assets Recovery Center Investments, LLC, and various other entities (the plaintiff entities), on the plaintiff entities' breach-of-contract claim and dismissing with prejudice all of the plaintiff entities' alternative claims for damages and AMH's counterclaims. We agree with AMH's argument that the trial court erred in denying its motion for an involuntary dismissal because the plaintiff entities failed to prove damages.[1] Accordingly, we reverse the amended final judgment to the extent that it awarded damages to the plaintiff entities, affirm the amended final judgment to the extent that it disposed of the plaintiff entities' alternative claims for damages and AMH's counterclaims, and remand for entry of an involuntary dismissal of the plaintiff entities' breach-of-contract claim.[2]

         Background

         In 2003, the parties orally agreed that AMH would locate distressed mortgages that holders were typically willing to sell for less than face value, the plaintiff entities would provide the capital to finance the purchase of the distressed mortgages, and AMH would service the loans on behalf of the plaintiff entities. Specifically, they agreed that any money that AMH collected when servicing these loans would be applied as follows: first, AMH would reimburse itself for certain hard costs incurred while servicing and collecting the loans; second, the plaintiff entities would be reimbursed for the capital expended to acquire the loans; and third, once the plaintiff entities had been fully reimbursed as to a particular group of loans, the parties would split the remaining proceeds from that group evenly. With the foreclosure crisis looming, however, AMH became indebted to the plaintiff entities, and the parties' business relationship went awry. Consequently, in November 2008, the parties orally agreed that AMH would stop servicing the loans and would transfer all active loan files to the plaintiff entities and that the plaintiff entities would not seek to recover any money that AMH owed them (the walkaway agreement). About six months after AMH transferred the files to the plaintiff entities, however, AMH claimed that it had accidentally included in the transfer approximately 170 loans that were not originally part of the walkaway agreement, and it resumed servicing and collecting payments on these 170 loans (the disputed loans).

         The plaintiff entities sued AMH for breach of the walkaway agreement.[3]The trial court bifurcated proceedings by holding a bench trial on all of the parties' substantive claims and counterclaims followed by a separate bench trial on damages. At the conclusion of the first bench trial, the court rejected AMH's assertions that the walkaway agreement was unenforceable and that it owned the disputed loans; found that the plaintiff entities owned the disputed loans and that, pursuant to the walkaway agreement, AMH owed the plaintiff entities any monies that it had collected on the disputed loans and was liable for any damages; reserved jurisdiction to determine the amount of damages, if any, due to the plaintiff entities; and dismissed with prejudice the plaintiff entities' remaining claims and AMH's counterclaims.

         Before the damages trial, the plaintiff entities filed a written "memorandum regarding damage calculation" in which they requested damages in the amount of all monies that AMH had collected on the disputed loans after the parties had entered into the walkaway agreement. AMH responded, in pertinent part, that an award of damages in the amount of AMH's gross collections would fail to account for the costs that AMH had incurred in collecting and servicing the disputed loans and, as a remedy for breach of contract, would improperly put the plaintiff entities in a better position than they would have been if the walkaway agreement had not been breached.

         At the damages hearing, the plaintiff entities relied on their memorandum and asserted that any costs that AMH had incurred in collecting and servicing loans covered by the walkaway agreement had been incurred through AMH's own wrongdoing. AMH responded that under a "breach of contract damage analysis, . . . the Plaintiff entities should not be put into a position better than they would have been, but for the breach" and asserted that the costs that AMH had incurred should be considered as "various setoffs to the overall gross number." AMH offered to establish an appropriate setoff by having Cassagnol testify, in pertinent part, to AMH's costs in servicing the disputed loans, and it noted that, in discovery, the plaintiff entities had acknowledged that fifty dollars per loan per month was a reasonable servicing fee. The plaintiff entities responded by reiterating that AMH should not be entitled to a setoff based on its wrongdoing.

          The trial court agreed that AMH was not entitled to a setoff. The court noted that the first trial had addressed whether the walkaway agreement was valid and could be enforced, and it clarified its prior ruling that AMH had breached the walkaway agreement and that the disputed loans belonged to the plaintiff entities. Nonetheless, to ...


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