Full Opinion

DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT FISION CORPORATION, Appellant, v. MARIA FRUEH, Appellee. No. 2D22-2517 August 23, 2023 Appeal from the Circuit Court for Hillsborough County; Darren D. Farfante, Judge. Cory L. Chandler of Spector Gadon Rosen Vinci P.C., St. Petersburg; and Kristen Over of Spector Gadon Rosen Vinci P.C., St. Petersburg (substituted as counsel of record), for Appellant. V. Stephen Cohen of Bajo Cohen Agliano P.A., Tampa, for Appellee. LaROSE, Judge. Fision Corporation appeals the summary judgment entered against it in a derivative action stemming from an unpaid loan. See § 605.0802, Fla. Stat. (2020); see generally Citizens Nat'l Bank of St. Petersburg v. Peters, 175 So. 2d 54, 56 (Fla. 2d DCA 1965) ("[A] derivative suit [i]s an action in which a stockholder seeks to enforce a right of action existing in the corporation. . . . If . . . the injury is primarily against the corporation, or the stockholders generally, then the cause of action is in the corporation and the individual[ stockholder's] right to bring it is derived from the corporation." (citations omitted)). We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A). Fision failed to pay off the loan according to the loan terms. Accordingly, we affirm. Background In March 2018, MGA Holdings, LLC, loaned Fision $82,500. A promissory note memorialized the loan. In relevant part, paragraph 2.b. of the note provides as follows: On November 26, 2018[,] . . . Borrower shall pay to Lender the Loan amount of Eighty[-]Two Thousand Five Hundred and 00/100 Dollars ($82,500.00), plus interest in the amount of Five Hundred Fifty and 00/100 Dollars ($550.00), for a total of Eighty[-]Three Thousand Fifty and 00/100 Dollars ($83,050.00). These funds shall be paid out of any bridge financing or other funding received by either the Borrower or the Guarantor. If no such financing or funding has taken place, the funds will be due regardless. As we explain later, the promissory note contained no provision allowing for repayment in Fision stock. Fision did not timely repay the loan. So, in November 2020, Maria Frueh, the owner of half of MGA's outstanding membership units, filed a derivative action to recover the monies Fision owed to MGA. She alleged that Fision's failure to pay breached the terms of the note. Further, she recounted that William C. Gerhauser, MGA's president and the owner of the other half of MGA's outstanding membership units (and, simultaneously, a member of Fision's board of directors), failed to consult her before making the loan.1 1 Delaware law governs MGA's Operating Agreement. The parties debate whether the loan from MGA to Fision satisfied Delaware's business judgment rule and the applicability of the "entire fairness" standard. See generally Manti Holdings, LLC v. Carlyle Grp. Inc., No. 2020-0657, 2022 WL 1815759, at *8 (Del. Ch. June 3, 2022) (explaining the "entire fairness" standard). We do not address this tertiary issue. 2 The parties filed cross-motions for summary judgment. See Fla. R. Civ. P. 1.510. Fision admitted that it had failed to timely repay its debt. However, it asserted that "on March 18, 2021, Fision transferred to MGA shares of [Fision] stock with a value of $98,450.00. That amount was sufficient to repay MGA all principal and interest on the loan." Ms. Frueh countered that no such transfer had occurred and, even if it had, the note did not contemplate satisfaction of the debt with Fision stock. After a hearing, the trial court granted Ms. Frueh's motion and denied Fision's. It reasoned that the note "[wa]s not convertible." Instead, the trial court found, "it was certainly explicit in the language of this note that the funds would be either funds received from financing or through some other source, essentially a cash payment back of the $82,500 plus interest in the amount of $550." The trial court declined to address whether Fision had transferred stock to MGA. Fision moved for rehearing, in support of which it attached an affidavit from Mr. Gerhauser. Mr. Gerhauser averred that "[a]t the time the Promissory Note was proffered, neither MGA nor Fision intended that the Promissory Note could only be repaid in legal tender." Alternatively, he contended that "[i]n March 2021, Fision and MGA agreed that Fision could repay the debt evidenced by the Promissory Note by transferring to MGA shares of Fision common stock equal in value to the principal and accrued interest due on the Promissory Note."2 Fision also provided the 2 Fision filed two affidavits from Mr. Gerhauser before entry of summary judgment. In these earlier affidavits, Mr. Gerhauser never claimed that there was an agreement for Fision to satisfy its debt with shares of Fision stock; rather, Mr. Gerhauser only offered that Fision had already satisfied the debt with stock. Indeed, in its April 26, 2022, summary judgment motion, Fision simply stated that the "loan need not be repaid in cash (unless the terms of the loan require it), and that the transfer of property, including shares of stock, of a value equal to the 3 trial court with several Securities & Exchange Commission forms and printouts purportedly evidencing a transfer. Ms. Frueh countered that the affidavit was untrue as there had never been such an agreement, and, regardless, she reiterated, Fision had transferred no stock. The trial court summarily denied rehearing. Analysis Fision contends that the trial court mistakenly interpreted the note to require a cash repayment. For sure, the note neither permitted nor prohibited repayment with Fision stock. Fision complains that the trial court failed to draw every possible inference in its favor, as the nonmoving party, when it concluded that the debt was nonconvertible to shares of stock. Fision alleges that the trial court compounded its error by rejecting Mr. Gerhauser's rehearing affidavit, thereby making credibility determinations, and resolving disputed issues of fact. Fision stresses that genuine issues of material fact remain for trial. I. The Summary Judgment Standard (of Review) "We review orders granting summary judgment de novo." SHM Cape Harbour, LLC v. Realmark META, LLC, 335 So. 3d 754, 758-59 (Fla. 2d DCA 2022). Similarly, we review de novo the trial court's interpretation of the note's terms. See U.S. Bank Nat'l Ass'n v. Rios, 166 So. 3d 202, 208 (Fla. 2d DCA 2015) ("[A] decision interpreting a contract presents an issue of law that is reviewable by the de novo standard of review." (alteration in original) (quoting Mgmt. Comput. Controls, Inc. v. Charles Perry Constr., Inc., 743 So. 2d 627, 630 (Fla. 1st DCA 1999))). debt repays the debt." Mr. Gerhauser's rehearing affidavit was the first time that Fision claimed the parties had agreed Fision's stock could be used to satisfy its debt. 4 The trial court entered summary judgment under the relatively new version of rule 1.510. See In re Amends. to Fla. R. Civ. P. 1.510, 317 So. 3d 72, 77 (Fla. 2021) ("New rule 1.510 takes effect on May 1, 2021. This means that the new rule must govern the adjudication of any summary judgment motion decided on or after that date, including in pending cases."). The revised version of rule 1.510(a) provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Revised rule 1.510 "align[ed] Florida's summary judgment standard with that of the federal courts." In re Amends. to Fla. R. Civ. P. 1.510, 309 So. 3d 192, 192 (Fla. 2020). Subject to several time-related changes, our supreme court "adopt[ed] the text of the federal summary judgment rule." In re Amends. to Fla. R. Civ. P. 1.510, 317 So. 3d at 74. As a result, we are guided and bound by "the large body of case law interpreting and applying [the federal summary judgment rule]." Id. at 75. The United States Supreme Court directs that summary judgment is proper "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Insofar as Fision argues that Ms. Frueh failed to overcome or completely negate its arguments, this is not her burden under the revised rule. See In re Amends. to Fla. R. Civ. P. 1.510, 317 So. 3d at 76 ("In Florida it will no longer be plausible to maintain that 'the existence of any competent evidence creating an issue of fact, however credible or incredible, substantial or trivial, stops the inquiry and precludes summary judgment, so long as the "slightest 5 doubt" is raised.' " (quoting Bruce J. Berman & Peter D. Webster, Berman's Florida Civil Procedure § 1.510:5 (2020 ed.))). Instead, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Stated differently, "the inquiry is 'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.' " Mane FL Corp. v. Beckman, 355 So. 3d 418, 425 (Fla. 4th DCA 2023) (quoting Anderson, 477 U.S. at 251-52). Now, the summary judgment movant "satisf[ies] its initial burden of production in either of two ways: '[I]f the nonmoving party must prove X to prevail [at trial], the moving party at summary judgment can either produce evidence that X is not so or point out that the nonmoving party lacks the evidence to prove X.' " In re Amends. to Fla. R. Civ. P. 1.510, 317 So. 3d at 75 (alterations in original) (quoting Bedford v. Doe, 880 F.3d 993, 996-97 (8th Cir. 2018)); In re Amends. to Fla. R. Civ. P. 1.510, 309 So. 3d at 193 ("[T]he burden on the moving party may be discharged by 'showing'—that is, pointing out to the [trial] court—that there is an absence of evidence to support the nonmoving party's case." (quoting Celotex, 477 U.S. at 325)). And then, "[w]hen the moving party has carried its burden[,] . . . its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (footnote omitted). 6 II. The Promissory Note, Rules of Construction, and the Bard Turning to the note, "[o]ur goal in contractual interpretation 'is to arrive at a reasonable interpretation of the entire agreement, and to construe contractual terms 'in such a manner as to give them a meaning consistent with the apparent object of the parties in entering into the contract.' " Fitness Int'l, LLC v. 93 FLRPT, LLC, 361 So. 3d 914, 919 (Fla. 2d DCA 2023) (quoting Beach Towing Servs., Inc. v. Sunset Land Assocs., 278 So. 3d 857, 861 (Fla. 3d DCA 2019)). When the contract's language "is clear and unambiguous, the contract must be interpreted and enforced in accordance with its plain meaning." Hester v. Fla. Cap. Grp., Inc., 189 So. 3d 950, 955 (Fla. 2d DCA 2016) (quoting CitiMortgage, Inc. v. Turner, 172 So. 3d 502, 504 (Fla. 1st DCA 2015)). Correspondingly, "[w]hen a contract is silent on a particular matter, courts should not impose contractual rights and duties on the parties under the guise of construction." Le Scampi Condo. Ass'n v. Hall, 200 So. 3d 187, 190 (Fla. 2d DCA 2016). The promissory note required Fision to repay MGA $83,050 "out of any bridge financing or other funding." We cannot fault the trial court for finding that repayment was due in legal tender. See Legal Tender, Black's Law Dictionary 1035 (Deluxe 10th ed. 2014) (defining "legal tender" as "[t]he money (bills and coins) approved in a country for the payment of debts, the purchase of goods, and other exchanges of value"). Cash is the coin of the realm. Fision cannot raise a defense that stock could be substituted for cash, given the note's language. Although the note contains no provision authorizing conversion of the debt to shares of stock, Fision remains unfazed. In its telling, "nothing in the Promissory Note itself indicated that it was 7 non-convertible or that the debt must be repaid in cash."3 This is true, as far as it goes. Fision's reading contradicts the note's language. See 11 Williston on Contracts § 32.2 (4th ed. 2023) ("[I]f parties to a contract omit terms, particularly, terms that are readily found in other, similar contracts, the inescapable conclusion is that the parties intended the omission."). We hesitate to adopt Fision's position. See Le Scampi Condo. Ass'n, 200 So. 3d at 190; BMW of N. Am., Inc. v. Krathen, 471 So. 2d 585, 587 (Fla. 4th DCA 1985). After all, "[c]ontracting parties have the right, the opportunity, and the obligation to memorialize the terms of their agreement, and they omit terms at their peril." Advanzeon Sols., Inc. v. State ex rel. Fla. Dep't of Fin. Servs., 321 So. 3d 911, 915 (Fla. 1st DCA 2021); see also KRG Oldsmar Project Co. v. CWI, Inc., 358 So. 3d 464, 469 (Fla. 2d DCA 2023) ("When a contract is clear and unambiguous, the court's role is to enforce the contract as written, not to rewrite the contract to make it more reasonable for one of the parties." (quoting Snyder v. Fla. Prepaid Coll. Bd., 269 So. 3d 586, 592 (Fla. 1st DCA 2019))). Moreover, on a practical level, it cannot be the case that where something is not specifically disallowed in a contract it is, therefore, allowed. Such a rule would require contracting parties to specifically identify and disclaim innumerable possibilities and potentialities. As a result, contracts would be interminable and unwieldy and would undermine parties' willingness or ability to contract in the first place. Cf. William Shakespeare, Hamlet act 1, sc. 5, l. 167-68 ("There are more 3 Interesting, but not central to our disposition, documents submitted with Mr. Gerhauser's rehearing affidavit indicate that the supposedly transferred stock was not readily convertible, in any event. 8 things in heaven and earth, Horatio,/Than are dreamt of in your philosophy."). The trial court did not err in finding that cash was the medium of repayment of the note. There were no genuine issues of material fact in dispute precluding entry of summary judgment in favor of Ms. Frueh. III. Time Waits for No One; Rehearing Does Not Save Fision Fision contends that the trial court "improperly refused to consider [Mr.] Gerhauser's [rehearing] affidavit" and, consequently, erred in summarily denying its rehearing motion. Fision tells us that the affidavit was sufficient to defeat Ms. Frueh's summary judgment motion. See Petrucci v. Brinson, 179 So. 3d 398, 400 (Fla. 1st DCA 2015) ("A trial court has broad discretion to grant a rehearing of a summary judgment when the party seeking rehearing submits matters that would have created an issue precluding summary judgment."). Rule 1.530(a) provides that "[o]n a motion for a rehearing of matters heard without a jury, including summary judgments, the court may open the judgment if one has been entered, take additional testimony, and enter a new judgment." Fla. R. Civ. P. 1.530(a). "As a general rule, a trial court has broad discretion to allow a party to reopen its case and present additional evidence . . . ." Grider-Garcia v. State Farm Mut. Auto., 73 So. 3d 847, 849 (Fla. 5th DCA 2011). We "review[ ] the denial of a motion to reopen a case for abuse of discretion." Loftis v. Loftis, 208 So. 3d 824, 826 (Fla. 5th DCA 2017) (citing Grider-Garcia, 73 So. 3d at 849). "Discretion is abused only 'when the judicial action is arbitrary, fanciful, or unreasonable, which is another way of saying that discretion is abused only where no reasonable [person] would take the view adopted by the trial court.' " Trease v. State, 768 So. 2d 1050, 1053 n.2 (Fla. 2000) (quoting Huff v. State, 569 So. 2d 1247, 1249 (Fla. 1990)). 9 Forty One Yellow, LLC v. Escalona, 305 So. 3d 782, 791 (Fla. 2d DCA 2020) (alterations in original). Nevertheless, trial courts need not grant rehearing when the movant raises a new argument that could have, and should have, been raised prior to entry of summary judgment. See Fitchner v. Lifesouth Cmty. Blood Ctrs., Inc., 88 So. 3d 269, 278 (Fla. 1st DCA 2012) ("We agree that the trial judge has discretion to decline to consider a new argument on rehearing . . . . We do not suggest that trial judges are required to consider new issues presented for the first time on rehearing. Our point is simply that they have the authority to hear new issues." (footnote omitted) (citations omitted)). "[W]hen 'exercising its discretion to reopen a case for additional evidence, the court should consider the timeliness of the motion, the character of the testimony, and the effect of granting the motion.' " Forty One Yellow, LLC, 305 So. 3d at 791 (quoting Burk v. State, 497 So. 2d 731, 733 (Fla. 2d DCA 1986)). Fision's position going into the summary judgment hearing was that the note allowed repayment with Fision stock. But Fision's rehearing motion and Mr. Gerhauser's related affidavit stated that "[i]n March 2021 MGA and Fision agreed to convert the debt evidenced by the Promissory Note into shares of stock in Fision." Although seemingly subtle, Fision shifted its theory of the case as it tried to obtain a rehearing. "Just as time waits for no one, there are limits on how long our legal system will wait for anyone to bring a claim." Chavez v. Sec'y Fla. Dep't of Corr., 647 F.3d 1057, 1058 (11th Cir. 2011). Fision fails to explain why it did not raise its new theory earlier. The trial court was under no obligation to permit rehearing on this tardy claim. See Forty One Yellow, LLC, 305 So. 3d at 792 (explaining that in evaluating a rule 1.530(a) motion for rehearing a court may examine "the reasonableness 10 of the excuse justifying the request to reopen"). The trial court did not abuse its discretion in denying Fision's rehearing motion. See Canakaris v. Canakaris, 382 So. 2d 1197, 1203 (Fla. 1980) ("If reasonable men could differ as to the propriety of the action taken by the trial court, then the action is not unreasonable and there can be no finding of an abuse of discretion. The discretionary ruling of the trial judge should be disturbed only when his decision fails to satisfy this test of reasonableness."). In approving the trial court's denial of Fision's rehearing motion, we do not elevate form over substance. Cf. Young v. Naples Cmty. Hosp., Inc., 129 So. 3d 456, 460 (Fla. 2d DCA 2014) ("To suggest that the trial court should not consider the applicable argument for the first time at rehearing would result in 'an unnecessary triumph of procedure over substance.' " (quoting Fitchner, 88 So. 3d at 279)). But we must recognize that Fision sought to raise a new theory based on evidence that was available as early as March 2021. The law does not countenance those who are dilatory and sleep on their rights. See Allard v. Al–Nayem Int'l, Inc., 59 So. 3d 198, 202 (Fla. 2d DCA 2011) (stating that "[a] party's failure to prove damages is not a proper ground for rehearing" as "[r]ehearing is not intended as a device to present additional evidence that was available, although not presented, at the original trial" (quoting St. Petersburg Hous. Auth. v. J.R. Dev., 706 So. 2d 1377, 1378 (Fla. 2d DCA 1998))); cf. Resort of Indian Spring, Inc. v. Indian Spring Country Club, Inc., 747 So. 2d 974, 978 (Fla. 4th DCA 1999) ("Because motions for a new trial based on newly discovered evidence are looked upon with some disfavor as encouraging looseness in practice, it is the proponent's burden to prove due diligence in securing the evidence."). 11 Conclusion The trial court properly granted summary judgment in favor of Ms. Frueh on behalf of MGA. Affirmed. SMITH, J., Concurs. ATKINSON, J., Concurs in result only. Opinion subject to revision prior to official publication. 12