HORIZONS A FAR, LLC, APPELLANT,
v.
PLAZA N 15, LLC, ET AL., APPELLEES

Fla. 5th DCA | 2012-07-27
No. 5D11-2469
TORPY and LAWSON, JJ, concur.
114 So. 3d 992 Florida District Court of Appeal, Fifth District (2012) Positive Treatment
Cited by 5 cases

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Synopsis

Horizons, a member of Plaza N 15, LLC, sought appointment of a receiver in a breach of fiduciary duty action. The trial court denied the request based on section 13.4 of the operating agreement, which it interpreted as a blanket waiver of members' rights to seek receiver appointment. The Fifth District Court of Appeal reversed, holding that section 13.4's waiver applies only in the context of dissolution or liquidation actions, not to independent actions for other relief.


Holding

Section 13.4's waiver of the right to seek appointment of a receiver applies only in the context of dissolution or liquidation actions, not to independent actions seeking other relief such as breach of fiduciary duty claims. The trial court's interpretation that the waiver applied broadly to all actions was erroneous.


Headnotes

[1] A contractual waiver of the right to seek appointment of a receiver is interpreted in light of the entire agreement, not in isolation.

[2] A provision in an operating agreement waiving the right to seek appointment of a receiver is generally limited to actions for dissolution or liquidation.

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Key Quotes

“courts are not to isolate a single term or group of words and read that part in isolation; the goal is to arrive at a reasonable interpretation of the text of the entire agreement to accomplish its stated meaning and purpose”

Establishes the proper approach to contract interpretation by requiring holistic analysis rather than isolated textual analysis

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Facts & Procedural History

Horizons filed a complaint against Plaza's managing member alleging breach of fiduciary duty and conflict of interest violations of the operating agre…

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Opinion of the Court
COHEN, J.

COHEN, J.

Horizons A Far, LLC (“Horizons”), seeks interlocutory review of the trial court’s non-final order denying the appointment of a receiver entered in favor of Appellees. We reverse.

In 2011, Horizons, a member of Plaza N 15, LLC (“Plaza”), filed a sworn complaint against Plaza’s managing member and subsidiary company. The complaint alleged causes of action for breach of fiduciary duty and conflict of interest arising primarily from violations of Plaza’s operating agreement. The complaint further sought injunctive relief in the form of an accounting, the temporary or permanent, if applicable, removal of the managing member, and the temporary appointment of a receiver to aid in an accounting and act as manager of Plaza in the manager’s stead. Horizons simultaneously filed an emergency motion seeking the same injunctive relief and appointment of a receiver.

While the motion was pending, the parties completed an accounting and Horizons filed an amended sworn complaint wherein it altered the claim for an accounting and raised additional causes of action, including fraud. After a hearing on the emergency motion, of which there is no transcript, the trial court denied the motion on the basis that Horizons waived the right to seek appointment of a receiver under Plaza’s operating agreement.1 We disagree with the trial court’s interpretation of the operating agreement.

The trial court based its decision on section 13.4 of the operating agreement, which provides:

No Petition for Dissohition. The Members agree that irreparable damage would be done to the good will and reputation of the Company if any Member should bring an action in any court to dissolve the Company and to have a liquidator or receiver for the Company appointed. Care has been taken in this Agreement to provide what the parties *994feel is fair and just payment in liquidation of the Interests of all Members. Accordingly, each Member hereby waives and renounces any right to file or pursue any such petition for dissolution of the Company or to seek the appointment by any court of a liquidator or receiver for the Company. If any Member, in violation of the foregoing provision, does file or pursue any such dissolution or liquidation petition or action in any court, the Company and/or any of the other Members shall be entitled to an injunction, as a matter of right, against such petition or action.

On appeal, Horizons argues section 13.4 did not constitute a waiver of its right to seek appointment of a receiver because it did not file a dissolution or liquidation action. Horizons claims section 13.4 only waives a member’s right to seek appointment of a receiver within the context of a dissolution or liquidation action. Conversely, Plaza argues the trial court properly interpreted the operating agreement to include a waiver of its members’ right to seek appointment of a receiver in all actions directed towards the company.

The trial court’s interpretation of a contract is a question of law subject to de novo review. Whitley v. Royal Trails Prop. Owners’ Ass’n, Inc., 910 So.2d 381, 383 (Fla. 5th DCA 2005). The parties’ intent, which must be gleaned from the four corners of the document, governs contract interpretation and construction. Crawford v. Barker, 64 So.3d 1246,, 1255 (Fla.2011); Whitley, 910 So.2d at 383. A clear, complete and unambiguous contract does not require judicial construction. Jenkins v. Eckerd Corp., 913 So.2d 43, 50 (Fla. 1st DCA 2005). In interpreting a contract, “[cjourts are not to isolate a single term or group of words and read that part in isolation; the goal is to arrive at a reasonable interpretation of the text of the entire agreement to accomplish its stated meaning and purpose.” Delissio v. Delissio, 821 So.2d 350, 353 (Fla. 1st DCA 2002); see also Am. Home Assurance Co. v. Larkin Gen. Hosp., Ltd., 593 So.2d 195, 197 (Fla.1992) (stating determination of intent requires consideration of contract’s language, subject matter, and object and purpose).

Section 13.4 is comprised of four sentences: two general statements of purpose, a statement of the parties’ agreement as to waiver, and a statement providing for the consequences of violating the agreement. The first sentence provides that the members agree “irreparable damage would be done to the good will and reputation of the Company if any Member should bring an action in any court to dissolve the Company and to have a liquidator or receiver for the Company appointed.” (Emphasis added). Employing the conjunction “and” suggests that the damage to Plaza would result from the filing of a dissolution action and petition to have a receiver (or liquidator) appointed therein. While the first sentence explains the potential damage of seeking to appoint a receiver or liquidator in the context of a dissolution action, the second sentence states that: “Care has been taken in this Agreement to provide what the parties feel is fair and just payment in liquidation of the Interests of all Members.” (Emphasis added). Plaza’s general interpretation of waiver is not consistent with the limited context in which the first two sentences of section 13.4 exist — dissolution and liquidation actions.

The third sentence, which the trial court found decisive, provides: “[E]ach Member hereby waives and renounces any right to file or pursue any such petition for dissolution of the Company or to seek the ap*995pointment by any court of a liquidator or receiver for the Company.” (Emphasis added). Though this language indicates the parties intended that the members waived the right to seek appointment of a receiver generally, the surrounding language of section 1B.4 strongly supports the interpretation that the parties’ agreement to waive the right to appoint a receiver was intended to be limited to the context of dissolution or liquidation proceedings.

The final sentence provides for a penalty if the waiver agreement is violated. That sentence reads: “If any Member ... does file or pursue any such dissolution or liquidation petition or action in any court, the Company and/or any of the other Members shall be entitled to an injunction ... against such petition or action.” (Emphasis added). Under Plaza’s interpretation, it would not be entitled to an injunction where a receiver is sought outside the context of a dissolution or liquidation action, an interpretation which renders the injunction penalty partially inapplicable and meaningless. See Moore v. State Farm Mut. Auto. Ins. Co., 916 So.2d 871, 877 (Fla. 2d DCA 2005) (explaining courts will not render provisions meaningless when there is a reasonable interpretation that does not do so). Additionally, the words “or action in any court” do not refer to an action to appoint a receiver, as Plaza claims. Instead, the words “dissolution” and “liquidation” modify the words “petition” and “action,” and no reference is made in this sentence to an action to appoint a receiver.

A limited interpretation of waiver under section 13.4 is reasonable in the context of the entire operating agreement. Section 13.4 is but part of the larger article of the operating agreement dealing with dissolution, liquidation and reinstatement of the company post-dissolution. Section 13.4 is the fourth and final provision of the article, restricting company members from seeking specific relief in court. When read in the context of the entire agreement, section 13.4 evidences the parties’ intent to waive the right to appoint a receiver only in the context of a dissolution or liquidation action. Accordingly, the trial court erred in its interpretation.

Because the trial court relied on an erroneous interpretation of the operating agreement, it did not reach the issue of whether appointment of a receiver was appropriate. There are significant expenses and ramifications to the appointment of a receiver, which should be exercised with great circumspection. See McAllister Hotel, Inc. v. Schatzberg, 40 So.2d 201 (Fla.1949); Apalachicola N.R. Co. v. Sommers, 79 Fla. 816, 85 So. 361 (1920). This Court does not express an opinion as to the merits of Horizons’ request to appoint a receiver, and remands for such a determination.

REVERSED and REMANDED.

TORPY and LAWSON, JJ, concur.


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Citator

Cited By

  • …ton appeals, claiming that the trial court misinterpreted, the contract. As we conduct our de novo review of the contract, we apply well-settled rules of contract interpretation to guide us along the way. See Horizons A Far, LLC v. Plaza N 15, LLC, 114 So. 3d 992, 994 (Fla. 5th DCA 2012); Kipp v. Kipp, 844 So. 2d 691, 693 (Fla. 4th DCA 2003). The intent of the parties governs contract interpretation and that intent is to be determined from the plain language of the agreement and the everyday meaning of the w…
  • Super Cars of Miami, LLC v. Jacques Bermon Webster, 300 So. 3d 752 (Fla. 3d DCA 2020)
    …antly clear that construing these clauses to allow for recovery beyond the cost of repairs against Webster, individually, would render the preceding limitation of liability provision wholly meaningless. See Horizons A Far, LLC v. Plaza N 15, LLC, 114 So. 3d 992, 994 (Fla. 5th DCA 2012) (“In interpreting a contract, ‘[c]ourts are not to isolate a single term or group of words and read that part in isolation; the goal is to arrive at a reasonable interpretation of the text of the entire agreement to accompli…
  • Pierce Law Grp., LLP v. Jaleh Factor, 408 So. 3d 148 (Fla. 3d DCA 2025)

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