final until disposition of timely filed motion for rehearing.
Appeal from the Circuit Court for Miami-Dade County, Lower
Tribunal No. 17-23549 Dennis J. Murphy, Judge.
Fodiman, P.A., and Todd R. Legon and William F. Rhodes, for
Singerman, LLP, and James D. Gassenheimer, Ashley Dillman
Bruce, and Stephanie M. Chaissan, for appellees.
LOGUE, SCALES, and HENDON, JJ. HENDON, J.
Landman a/k/a Sandra Lapciuc and PaulDan, LLC, appeal from
the trial court's order granting Isaac Lapciuc and Del
Valle Brands, Inc.'s emergency motion to enforce a
settlement agreement. We affirm in part and reverse in part.
Lapciuc ("Isaac") is the 85% majority shareholder
and president of Del Valle Brands ("DVB"), while
Sandra Landman ("Sandra") is a 15% minority
shareholder of DVB. DVB is a warehouse operation located in
the building solely owned by PaulDan LLC, whose sole
shareholder is Sandra. DVB leases the warehouse space from
PaulDan pursuant to the terms of a Triple-Net Lease. Sandra
and Isaac are former spouses whose respective rights to DVB
and PaulDan were decided by a June 2013 marital settlement
agreement ("MSA") and by the May 2017 settlement
agreement ("Settlement Agreement").
Settlement Agreement arose out of a dispute over Isaac's
purchase of Precision Trading ("Precision" or
"New Business"). Isaac allegedly pledged certain
DVB assets and cross-collateralized those assets with the
assets of Precision in connection with financing the
acquisition. Sandra objected to the proposed acquisition and
filed a shareholder derivative action against Isaac and DVB.
The parties entered into the Settlement Agreement. The trial
court dismissed the derivative action and all the associated
amended complaints, counterclaims, and third-party suits with
prejudice, retaining jurisdiction to enforce the incorporated
2018, Isaac negotiated increases in DVB's and
Precision's portfolios to expand both businesses. With
the new demands for product, Isaac applied to increase the
businesses' already existing asset-based line of credit
("LOC") by an additional $7 million (from $23
million for DVB and from $10 million for Precision) in order
to finance the new inventory demands. The additional LOC was
to have the same terms as the original LOC. Sandra objected,
asserting that she had the right to approve or object to the
new LOC, and claimed that the loan terms were not
commercially reasonable pursuant to provision 2(c)iii of the
Settlement Agreement, which provides:
iii. No Additional Indebtedness. Except for
commercially reasonable and prudent expenditures on behalf of
the New Business, Isaac will not incur or guaranty
any additional indebtedness exceeding the amounts currently
available to be borrowed through pending bank or other loans
unless the proceeds of the same are used to reduce the then
outstanding balance of Isaac's and DVB's obligation
to pay Sandra under her Employment Agreement with DVB.
(Emphasis added). After multiple communications between the
parties, Mercantile Bank ("Bank") decided it would
not close on the increased LOC until the dispute with Sandra
was resolved, either by a court order or by Sandra's
agreement to the new LOC. When Sandra refused to give her
consent to the increased LOC, and the new business contracts
were about to suffer from lack of additional inventory, Isaac
filed a motion to enforce the Settlement Agreement.
August 28, 2018 hearing on the motion to enforce, the trial
court noted that Sandra withdrew her objection to the LOC,
while maintaining that she did not "consent" to the
LOC nor waive her rights to challenge the LOC in the future.
Isaac's counsel stated that the Bank would not close
without both a court order approving the LOC pursuant to the
Settlement Agreement and a reaffirmation of the Lease's
self-executing subordination clause (either by Sandra or the
court), because Sandra had indirectly threatened the Bank
with legal action should it grant the LOC to Isaac.
Sandra's counsel argued against any order from the court
"approving" the LOC or the Lease, stating that
decision would amount to a declaratory judgment without an
evidentiary hearing necessary to prove the legitimacy of the
LOC or the Lease. After hearing both parties' arguments,
and noting Sandra's withdrawal of her objection to the
LOC, the trial court granted in part Isaac's Motion to
Enforce the Settlement Agreement. The court found that DVB
and Precision were authorized to enter into the LOC. The
court also found that the Lease is valid and enforceable, and
that the subordination clause is self-executing. Sandra
crux of Sandra's objection to the increased LOC - and
indeed, the salient issue at the hearing - was whether that
additional indebtedness was "commercially reasonable and
prudent," as provision 2(c)iii of the Settlement
Agreement required. The determination of that question,
however, necessitated a full evidentiary hearing.
Nevertheless, over Sandra's counsel's strenuous
objection, and without any documentary or testimonial
evidence that the increased LOC was a
"commercially reasonable and
prudent" expenditure, the trial court implicitly found
that the LOC was commercially appropriate by authorizing Del
Valle and Precision to proceed with the LOC. The trial court
should not have decided the merits of the motion to enforce
the Settlement Agreement without any evidentiary support in
the record to evaluate the commercial reasonableness, or not,
of the increased LOC. See, e.g., Empire Blue
Cross Blue Shield v. Pub. Health Tr. of Dade Cty., 546
So.2d 1077, 1078 (Fla. 3d DCA 1989) (holding that an
evidentiary hearing was necessary on motion to enforce a
settlement agreement where the value of certain medical
services required under the settlement agreement was
trial court additionally found that the Lease between the
parties was valid and enforceable and that the Landlord's
subordination clause was self-executing. Once again, the
trial court made this ruling without any evidentiary support,
and where that issue had not been raised in the motion but
was argued for the first time at the motion hearing. To be
clear, "the granting of relief, which is not sought by
the notice of hearing or which expands the scope of a hearing
and decides matters not noticed for hearing, violates due
process." Miami-Dade Cty. Bd. of Cty. Comm'rs v.
An Accountable Miami-Dade, 208 So.3d 724, 734 (Fla. 3d
DCA 2016) (quoting Celebrity Cruises, Inc. v.
Fernandes, 149 So.3d 744, 750 (Fla. 3d DCA 2014)
(quoting Connell v. Capital City Partners, LLC, 932
So.2d 442, 444 (Fla. 3d DCA 2006)); see also Mizrahi v.
Mizrahi, 867 So.2d 1211, 1213 (Fla. 3d DCA 2004)
("Due process protections prevent a trial court from
deciding matters not noticed for hearing and not the subject
of appropriate pleadings."); Epic Metals ...