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Florida Second DCA rules that plaintiff’s acceptance of late periodic payments under settlement agreement with defendant did not constitute implicit revision of the agreement

On May 26, 2021, in Mortellaro v. Caribe Health Center, Inc. et al., No. 2D19-4473, the Florida Second DCA ruled that the defendant in a premises liability lawsuit had materially breached the time limitations for the installment payments required under a settlement agreement with the plaintiff. Pursuant to the settlement agreement, the trial court had entered a $500,000 final judgment in favor of the plaintiff, but the agreement also permitted the defendant to satisfy the final judgment in full for $100,000 "only if" it "timely made" thirteen monthly payments. The agreement additionally included a grace period for the defendant to cure any delinquency upon written notice of the delinquency by the plaintiff. Notwithstanding the financial risks, the defendant was repeatedly late in making payments, even after receiving the 10-day cure letters, and even after having to agree to an amended final Judgment adding a guarantor to the judgment. The plaintiff eventually sent the defendant a letter indicating that settlement agreement was no longer in effect and that the full amount of the $500,000 judgment, less amounts already paid, were due and owing, but invited the defendant to propose new settlement termsthat would require the defendant’s disclosure of its financial condition. Over the next few months, the defendant continued to make payments under the original schedule. Allthe receipts that the plaintiff provided to the defendant indicated that the payment had been received "in partial satisfaction of the Amended Final Judgment." When the defendant submitted the final payment under the original schedule, it included the notation, "Caribe Payment 10 (PIF) full and final payment." The plaintiff did not deposit the check. When the defendant subsequently sought to enforce the final judgment, the trial court found that the late payments were not material breaches of the settlement agreement and granted the defendant’s motion. The Second DCA disagreed, finding that in light of the express language of the agreement the defendant’s failure to abide by the time limitations for payment constituted a material breach of the agreement, citing in support Treasure Coast, Inc. v. Ludlum Constr. Co., 760 So. 2d 232, 234–35 (Fla. 4th DCA 2000); Atlanta Jet v. Liberty Aircraft Servs., LLC, 866 So. 2d 148, 150 (Fla. 4th DCA 2004); Sublime, Inc. v. Boardman's Inc., 849 So. 2d 470, 471 (Fla. 4th DCA 2003); and Hufcor/Gulfstream, Inc. v. Homestead Concrete & Drainage, Inc., 831 So. 2d 767, 769 (Fla. 4th DCA 2002). The Second DCA also rejected the defendant’s argument that the plaintiff had implicitlyagreed to a revision of the agreement by accepting payments from the defendant, noting that while subsequent conduct by the parties can modify the terms in a contract (citing see St. Joe Corp. v. McIver, 875 So. 2d 375, 382 (Fla. 2004)), a sufficient pattern of acceptance of late payments and forbearance was not established in this case.