                                       IN THE DISTRICT COURT OF APPEAL
                                       FIRST DISTRICT, STATE OF FLORIDA

SCOTT CLEVELAND and                    NOT FINAL UNTIL TIME EXPIRES TO
STEPHANIE CLEVELAND,                   FILE MOTION FOR REHEARING AND
                                       DISPOSITION THEREOF IF FILED
      Appellants,
                                       CASE NO. 1D15-3036
v.

CROWN FINANCIAL, LLC,

      Appellee.


_____________________________/

Opinion filed January 15, 2016.

An appeal from the Circuit Court for Walton County.
William P. White, Jr., Judge.

Jeffrey U. Beaverstock and Daniel L. Burkard of Burr & Forman, LLP, Mobile, AL,
for Appellants.

Robert J. Powell and Matthew T. Davidson of Clark, Partington, Hart, Larry, Bond
& Stackhouse, Pensacola, for Appellee.




LEWIS, J.

      Appellants, Scott and Stephanie Cleveland, appeal a foreclosure judgment

entered in favor of Appellee, Crown Financial, LLC, raising three arguments, only

one of which warrants discussion. Appellants contend that the trial court erred in its
calculation of indebtedness because the parties’ Profit Sharing Agreement expressly

limited the financial advances made to Appellants by Appellee to $300,000. For the

following reasons, we reverse the judgment and remand.

      In March 2010, the parties, along with Marine Tank Terminal, Inc. (“MTT”),

executed a Profit Sharing Agreement (“Agreement”). Appellant Scott Cleveland

was labeled the Guarantor. In consideration of the mutual promises and covenants

of the parties, Paragraph 1 of the Agreement provided in part:

      Subject to the terms and conditions contained in this Agreement,
      [Appellee] agrees to make the sum of $300,000.00 available to MTT
      on a revolving basis for a term of one (1) year beginning on the date of
      this Agreement, solely for the purpose of purchasing Crude Products.
      All sums to be advanced by [Appellee] under this Agreement shall be
      advanced at such times, in such amounts, to such parties, in such
      manner, and under such terms and conditions as [Appellee] (in its sole
      discretion) may approve. The aggregate amount outstanding at any
      one time shall never exceed the sum of $300,000.00.

(Emphasis added). As security for “MTT’s obligations,” MTT agreed to deliver a

mortgage executed by Appellants for the Walton County property at issue, a security

agreement executed by MTT granting Appellee a first lien and security interest in

all of MTT’s inventory and accounts receivable, a mortgage for an Alabama

property, and a guaranty agreement executed by Appellant Scott Cleveland.

Paragraph 8 of the Agreement provided in part, “Upon the expiration of the term or

earlier termination of this Agreement, MTT shall pay to [Appellee] the outstanding

balance due hereunder (including without limitation, all advances which have not

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been repaid, and all Profit and Preferred Return).” Paragraph 11(d) provided that

“[t]his Agreement may be amended only by an instrument in writing executed by

the parties hereto.” Paragraph 11(e) provided that “[t]his Agreement constitutes the

entire agreement of the parties, and supersedes all understandings with respect to the

subject matter hereof.”

      The parties’ Mortgage provided in part as follows:

            Mortgagor is justly indebted to Mortgagee, having executed and
      delivered to Mortgagee that certain Profit Sharing Agreement . . .
      bearing the date of March 14, 2010 . . . according to the terms and
      conditions specified in the Agreement.

             In consideration of the indebtedness and to secure the payment
      to Mortgagee of the principal with interest and all other sums provided
      for in the Agreement and in this mortgage, including, but not limited
      to, any future advances that may be made by Mortgagee to Mortgagor
      in accordance with Paragraph 24 hereof, up to the maximum amount
      stated herein, and for performance of the agreements, conditions,
      covenants, provisions, and stipulations contained herein and therein,
      and in certain other agreements and instruments made and given by
      Mortgagor to Mortgagee in connection therewith, Mortgagor has
      granted, bargained, sold, and conveyed, and by these presents does
      grant, bargain, sell, and convey, unto Mortgagee that tract or parcel of
      land in Walton County . . . .

Paragraph 24 provided:

      Future Advances: Pursuant to F.S. 697.04, this mortgage shall secure
      not only the existing indebtedness evidenced by the note but also such
      future advances as may be made by Mortgagee to Mortgagor within 20
      years from the date hereof to the same extent as if such future advances
      were made on the date of the execution of this mortgage. The total
      amount of indebtedness that shall be so secured by this mortgage may
      decrease or increase from time to time, provided that the total unpaid
      balance so secured at any one time shall not exceed a principal amount
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      greater than double the original principal amount of the loan plus
      interest thereon and plus any disbursements made for the payment of
      taxes, levies, or insurance on the property covered by the lien of this
      mortgage, together with interest on such disbursements.

      Appellee filed its Mortgage Foreclosure Complaint against Appellants in 2013

and its Second Amended Mortgage Foreclosure Complaint in 2015. Appellee

alleged that the Agreement and Mortgage were in default and claimed that it was

owed $418,972.22 in principal. During the bench trial, one of Appellee’s members

and managers, Chad Tribe, testified. When asked to describe the money advanced

to Appellants, Tribe explained:

      The initial advance was in the amount of $300,000. We advanced
      Cleveland and MTT based on the premise that he was going to go buy
      crude products, turn around and sell them, make a blend, whatever he
      does in the crude world. To secure performance on that deal, he had
      just purchased these two pieces of property, one in Florida and one in
      Alabama, and he showed us the closing statement. He said: Look, I
      will put these properties up to back up the amounts that you can put, up
      to $300,000.
             We looked at the properties. We became comfortable to go
      ahead and move forward, which we did.
             The first deal of 300,000 paid back with the profit, based on the
      Profit Sharing Agreement terms. The second deal went out very
      quickly after that in the amount of 265,000, I believe. That deal also
      turned around and paid off, along with a nice profit. Soon thereafter,
      the third deal went out and the – I want to say around $300,000. And
      then within a month, he had requested us to go up over and above the
      300 that the Profit Sharing Agreement limited the initial advance to or
      the outstanding advance to. And we did reach $500,000 at one point.
      And in the third deal is where everything kind of started going the
      wrong way.

When asked if the last loan advance was for $500,000, Tribe replied, “I believe that

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is correct.” Tribe also testified regarding the credits made by Appellants toward the

outstanding advances and the credit that was based upon the sale of the foreclosed

Alabama property referred to in the Agreement. When asked if the additional

advances were memorialized in any of the documents before the trial court, Tribe

replied, “No.”

      Appellee’s counsel argued to the trial court that the advances over $300,000

were secured by the Mortgage pursuant to the Mortgage’s future advances clause.

Appellants’ counsel argued that there was “an absolute prohibition beyond $300,000

in the Profit Sharing Agreement” and that “if anything,” the Mortgage’s future

advances language conflicted with the “never exceed” language in the Agreement.

Appellants made the same arguments in their post-trial brief.

      In the Final Judgment, the trial court found that the principal due on the

Agreement and Mortgage was $419,069.64, implicitly agreeing with Appellee on

the issue at hand and rejecting Appellants’ argument to the contrary. With interest,

taxes, and attorney’s fees and costs and with a deduction for credited payments of

$114,415.45, the trial court ruled that Appellants owed Appellee $382,047.23 and

ordered the sale of the Walton County property. The trial court denied Appellants’

motion for rehearing and motion to stay. This appeal followed.

      Given that the issue on appeal involves contract interpretation, our standard

of review is de novo. CitiMortgage, Inc. v. Turner, 172 So. 3d 502, 504 (Fla. 1st

                                         5
DCA 2015). The cardinal rule of contractual interpretation is that when the language

of a contract is clear and unambiguous, the contract must be interpreted and enforced

in accordance with the plain meaning. Columbia Bank v. Columbia Developers,

LLC, 127 So. 3d 670, 673 (Fla. 1st DCA 2013). A contract is ambiguous when it is

susceptible to more than one reasonable interpretation. Turner, 172 So. 3d at 504.

“An ambiguous term in a contract is to be construed against the drafter.” City of

Homestead v. Johnson, 760 So. 2d 80, 84 (Fla. 2000).

      This case involves the interpretation of both the parties’ Agreement, which

both deem a promissory note, and their Mortgage. A “mortgage is the security for

the payment of the negotiable promissory note.” Perry v. Fairbanks Capital Corp.,

888 So. 2d 725, 727 (Fla. 5th DCA 2004).               A promissory note is not a

mortgage. Bank of N.Y. Mellon v. Reyes, 126 So. 3d 304, 308 (Fla. 3d DCA 2013).

Instead,

      “The promise to pay is one distinct agreement, and, if couched in proper
      terms is negotiable. The pledge of real estate to secure that promise is
      another distinct agreement, which ordinarily is not intended to affect in
      the least the promise to pay, but only to give a remedy for failure to
      carry out the promise to pay. The holder of the note may discard the
      mortgage entirely, and sue and recover on the note.”

Id. (quoting Taylor v. Am. Nat’l Bank of Pensacola, 57 So. 678 (Fla. 1912)). “When

a conflict exists between the terms of a note and the provisions of a mortgage . . . the

terms of the note should prevail.” Lewis v. Estate of Turcol, 709 So. 2d 186, 187

(Fla. 5th DCA 1998). Effect should be given to both the note and mortgage,
                                           6
however, “where there is no actual or necessary conflict.” Hotel Mgmt. Co. v.

Krickl, 158 So. 118, 119 (Fla. 1934).

      Appellee argues, as it did below, that any advances it made to Appellants over

the $300,000 provided for in the Agreement constituted future advances pursuant to

Paragraph 24 in the Mortgage. We might agree with Appellee had the Agreement

merely stated a principal sum of $300,000. However, the Agreement, which was

expressly secured by the Mortgage and incorporated therein, provided that the

“aggregate amount outstanding at any one time shall never exceed the sum of

$300,000.” While Appellants did not attend the bench trial or introduce any

evidence to refute Mr. Tribe’s testimony as to the amount of advances and credits,

Mr. Tribe testified that Appellant Scott Cleveland said that he would “put these

properties up to back up the amounts that you can put, up to $300,000.” Appellant’s

intent is evidenced in the plain language of the Agreement. Although it is undisputed

that Appellants requested that Appellee go above the $300,000 for what was

described as the “third deal,” the Agreement, which provided that the Mortgage at

issue would secure Appellants’ obligations, was not amended to reflect a $500,000

maximum advance amount. We note also that this was not a situation where the

additional funds were advanced outside of the Agreement’s one-year timeframe.

Instead, according to Mr. Tribe, all of the advances were made within that time

period.

                                         7
      To read, as Appellee does, the Agreement and the Mortgage to mean that the

Mortgage secures anything over $300,000 up to $600,000, would render

meaningless the “never exceed the sum of $300,000” language included within the

Agreement. In reaching this determination, we are guided by the principle that a

promissory note must prevail over a mortgage in the face of a conflict. See Lewis,

709 So. 2d at 187. We are also guided by the principle that any ambiguity caused

by the Mortgage’s future advances clause in the face of the Agreement’s “never

exceed” language must be construed against Appellee, which, according to Mr.

Tribe, had both the Agreement and the Mortgage drafted. See City of Homestead,

760 So. 2d at 84. While Appellee alternatively contends that Appellants waived

their right to make their argument on appeal, that contention was not made below,

and the record provides no indication that the trial court made any findings on the

issue or relied upon that ground in rendering its judgment. See Popular Bank of Fla.

v. R.C. Asesores Financieros, C.A., 797 So. 2d 614, 619 (Fla. 3d DCA 2001)

(“Generally speaking, the issue of waiver is one for the fact finder.”); Lodestar

Tower N. Palm Beach, Inc. v. Palm Beach Television Broad., Inc., 665 So. 2d 368,

370 (Fla. 4th DCA 1996) (“While an equitable estoppel argument may exist, that

too, is a matter for the finder-of-fact to determine.”); see also Bueno v. Workman,

20 So. 3d 993, 998 (Fla. 4th DCA 2009) (“[A]n appellate court cannot employ the

tipsy coachman rule where a lower court has not made factual findings on an issue

                                         8
and it would be inappropriate for an appellate court to do so.”).

      Based upon the foregoing, we reverse the Final Judgment and remand with

instructions that the trial court recalculate Appellants’ indebtedness to Appellee

consistent with this opinion.

      REVERSED in part and REMANDED with instructions.

BILBREY, J., CONCURS; BENTON, J. CONCURS WITH OPINION.




                                          9
BENTON, J., concurring.

      I join the court’s opinion. Crown Financial, LLC, stated a single count

complaint relying entirely on the Agreement and Mortgage under which it is not

entitled to relief. Crown Financial, LLC, is not entitled to relief on grounds it did

not plead or prove.




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