Stuart C. Irby Company v. Western Surety Company et al

Filing 85

OPINION AND ORDER granting in part and denying in part 75 Motion for summary judgment in favor of Irby and against BC Power. The Clerk shall enter judgment as set forth in paragraphs 1 through 3, terminate all pending motions and deadlines as moot, and close the file. See Opinion and Order for details. Signed by Judge John E. Steele on 12/5/2017. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STUART C. IRBY COMPANY,
Plaintiff,
v.

Case No:

2:16-cv-211-FtM-29CM

BC POWER, INC.,
Defendant.

OPINION AND ORDER
This matter comes before the Court on the plaintiff’s Motion
for Summary Judgment (Doc. #75) filed on April 10, 2017. Defendant
BC Power, Inc. filed a Response in Opposition (Doc. #79) on May
10, 2017. 1

For the reasons set forth below, the motion is granted

in part and denied in part.
I.
Summary

judgment

is

appropriate

only

when

the

Court

is

satisfied that “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a).

1On

“An issue of fact is ‘genuine’ if the

March 9, 2017, the Court granted a voluntary dismissal of
defendants Brooks & Freund, LLC and Western Surety Company, and
dismissed these defendants with prejudice. (Doc. #69.) Judgment
(Doc. #70) was filed the same day. Therefore, BC Power, Inc. (BC
Power) is the only remaining defendant.

record taken as a whole could lead a rational trier of fact to
find for the nonmoving party.”

Baby Buddies, Inc. v. Toys “R” Us,

Inc., 611 F.3d 1308, 1314 (11th Cir. 2010).

A fact is “material”

if it may affect the outcome of the suit under governing law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

“A

court must decide ‘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.’”
Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th
Cir. 2004) (citing Anderson, 477 U.S. at 251).
In ruling on a motion for summary judgment, the Court views
all evidence and draws all reasonable inferences in favor of the
non-moving party.

Scott v. Harris, 550 U.S. 372, 380 (2007); Tana

v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010).

However, “if

reasonable minds might differ on the inferences arising from
undisputed facts, then the court should deny summary judgment.”
St. Charles Foods, Inc. v. America’s Favorite Chicken Co., 198
F.3d 815, 819 (11th Cir. 1999) (quoting Warrior Tombigbee Transp.
Co. v. M/V Nan Fung, 695 F.2d 1294, 1296-97 (11th Cir. 1983)
(finding summary judgment “may be inappropriate even where the
parties agree on the basic facts, but disagree about the factual
inferences that should be drawn from these facts”)).

“If a

reasonable fact finder evaluating the evidence could draw more

2

than one inference from the facts, and if that inference introduces
a genuine issue of material fact, then the court should not grant
summary judgment.”

Allen v. Bd. of Pub. Educ., 495 F.3d 1306,

1315 (11th Cir. 2007).
II.
The undisputed facts, in a light most favorable to BC Power,
Inc., are as follows:
BC Power, Inc. (BC Power) is an electrical contractor which
entered into a subcontract with Brooks & Freund, LLC (Brooks) to
perform work on a project called the Orchid Run Apartments, LLC
(the Project) in Collier County, Florida.
Power

executed

a

Commercial

Credit

On July 31, 2012, BC

Application

(the

“Credit

Agreement”) (Doc. #17-3) with plaintiff Stuart C. Irby Company
(Irby), an electrical material supplier, and established an open
account with Irby to purchase electrical materials for use in
connection with the Project.

Irby sold electrical materials to BC

Power for use in the Project, but BC Power failed to fully pay for
the materials.

The unpaid principal amount is $46,145.05.

Brooks did not fully pay BC Power for the subcontract work,
and

allegedly

$685,967.42.

owed

BC

Power

an

unpaid

principal

amount

of

On or about February 24, 2016, BC Power executed an

Assignment of Accounts Receivable (the “Assignment”) transferring
to Irby its interest in the $685,967.42 owed by Brooks.

3

(Doc.

#17-6.)

On or about January 10, 2017, Brooks paid Irby $40,000

pursuant to a settlement of the $685,967.42 debt.

Irby will apply

the $40,000 to the balance owed it by BC Power. 2
Irby now seeks judgment against BC Power for the outstanding
unpaid principal balance (less the $40,000), plus accrued service
charges in the amount of $9,036.96, plus accrued interest, for a
total of $17,475.99 for the breach of the Credit Agreement by BC
Power.

(Doc. #75, pp. 4-5; Doc. #75-1, Exh. A.)

Irby also seeks

post-judgment interest, and asserts an entitlement to attorney
fees and costs.
III.
BC Power argues that Irby is not entitled to summary judgment
because there is a material question as to whether Irby is entitled
to

recover

any

amount

of

the

unpaid

principal

balance.

Specifically, BC Power asserts that Irby expressly agreed, and
owed a duty to BC Power, to recover the full amount of the accounts
receivables from Brooks, which were the subject of the Assignment.
BC Power further asserts that Irby assumed a fiduciary-type role
by agreeing to protect BC Power’s interest and to fight for full

2

Western Surety Company was the surety on the Payment Bond
signed by Brooks as contractor for the Project. (Doc. #17-2, Exh.
2.)

4

recovery of the receivables.

BC Power asserts that because the

settlement was a breach of this obligation, it does not owe any
money to Irby (and Irby owes BC Power money).

(Doc. #79, p. 3.)

BC Power’s arguments are without merit because the Assignment
creates no such obligation or fiduciary-type relationship between
BC Power and Irby.

The Assignment states that it is governed by

Mississippi law (Doc. #17-6, ¶6), which provides the following
with regard to the interpretation of a contract:
First, we must determine whether the contract
is ambiguous, and if it is not, then it must
be enforced as written. [ ] In making that
determination, the Court must review the
express wording of the contract as a whole. [
] If the contract is unambiguous, “the
intention of the contracting parties should be
gleaned solely from the wording of the
contract” and parole evidence should not be
considered. [ ] This Court must “accept the
plain meaning of a contract as the intent of
the parties where no ambiguity exists.” [ ]
“’An instrument that is clear, definite,
explicit, harmonious in all its provisions,
and is free from ambiguity’ will be enforced.”
[ ]
“The mere fact that the parties disagree about
the meaning of a provision of a contract does
not make the contract ambiguous as a matter of
law.” [ ] “Where the contract is unambiguous,
the ‘parties are bound by the language of the
instrument.’” [ ] Courts should not alter the
terms of a valid contract. “The right of
persons to contract is fundamental to our
jurisprudence and absent mutual mistake,
fraud[,] and/or illegality, the courts do not
have the authority to modify, add to, or
subtract from the terms of a contract validly

5

executed between two parties.” [ ] “With
limited exceptions, persons enjoy the freedom
to contract. When they do, they are bound by
the terms of their contracts.”
Epperson v. SOUTHBank, 93 So. 3d 10, 16-17 (Miss. 2012) (internal
citations omitted).

In a summary judgment case, Mississippi

advises that the reviewing Court “should determine only whether
the contract is ambiguous.” Id. at 17. If the terms are ambiguous,
then the case must be submitted to the trier of fact and summary
judgment denied.

Id.

The Assignment (Doc. #17-6) in this case is not ambiguous.
The Assignment is clear that the intention of the parties was not
to create any type of fiduciary relationship or obligation toward
BC Power.

BC Power transferred the accounts receivables, i.e., it

“grants, sells, conveys, assigns, transfers, and delivers” those
receivables to Irby.
“forever.”

(Id.)

(Doc. #17-6, ¶ 2.)

This transfer was

The transfer involved “all of its right, title

and interest in and to the Accounts Receivables”.

(Id.)

Thus, BC

Power retained no interest of any kind in the receivables, and
there were no restrictions on what could be done with the accounts
receivables.

Additionally,

BC

Power

recognized

that

the

assignment did not relieve BC Power of any of its obligations to
Irby. (Id. at ¶ 5.) In light of the clear and unequivocal language

6

of the Assignment, the parole evidence from Bruce Collins is not,
and cannot be made, admissible.
The Court finds that Irby is entitled to summary judgment on
its claim and to recover from BC Power. Only the amount of recovery
need be determined.

BC Power does not address, and therefore does

not dispute, the amounts.
Invoices (Principal)
The claim against BC Power is for breach of the Credit
Agreement.

The Terms and Conditions of Sale for the Credit

Agreement provide:
. . . if an invoice or obligation of Customer
is not paid by the net due date indicated on
Irby’s Invoice to Customer, Irby shall levy a
“service charge” to cover the additional cost
of handling the account in an amount equal to
one and one-half percent (1.5%) per month or
part
thereof
until
paid[.]
Customer
acknowledges and agrees that the charge is a
“service charge” levied by Irby to reimburse
Irby for the additional cost of carrying its
delinquent account and that such charge is not
an interest charge.
. . .
If it becomes necessary for Irby to retain
legal or collection agency assistance to
collect an overdue account, Customer shall pay
all such costs of same, including any
necessary and related incidental expenses
(collectively “Collection Costs”).
(Doc. #17-3, Exh. 3, p. 4.)

The invoices for the electrical

material total $50,890.52, however the Second Amended Complaint

7

provides that the unpaid principal amount is $46,145.05.
#17, ¶ 22; Doc. #17-4, Exh. 4.)

(Doc.

After subtracting the $40,000

amount of the Brooks settlement, this leaves a total of $6,145.05
still due from BC Power under the invoices.

The Court will award

this principal amount.
Service Charges
Irby seeks $9.036.96 in service charges for the period of the
due date on each individual invoice through January 10, 2017, the
date on which Brooks made the settlement payment towards the
balance.

(Doc. #75-1, Exh. A.)

The Terms and Conditions allow

Irby to levy a “service charge” for the additional cost of handling
collection on the debt.

As this is a specified contractual term,

the request will be granted in the amount of $8,875.37, based on
the Court’s calculations below.
The permitted service charge is an amount equal to 1.5% per
month or part of a month of the unpaid invoice as of the net due
date until paid.

The Court agrees with the dates used by Irby,

including the end date of January 10, 2017, and the amount of the
monthly service charge.

However, Irby applied the formula to the

exact number of days past due at a daily service charge.

The Court

declines to do so as the provision specifies per month or part of
a month, resulting in a slightly lower amount as follows:

8

NET
DATE

DUE UNTIL PAID INVOICE
DATE
AMOUNT

11/25/2015
11/25/2015
12/25/2015
12/25/2015
TOTAL:

1/10/2017
1/10/2017
1/10/2017
1/10/2017

5,968.60
8,915.40
29,680.80
1,580.25
46,145.05

MONTHLY
1.5%
CHARGE
89.53
133.73
445.21
23.70

NUMBER
OF
MONTHS
13.5
13.5
12.5
12.5

SERVICE
CHARGE
1,208.65
1,805.35
5,565.12
296.25
8,875.37

Prejudgment Interest
Whether plaintiff is entitled to prejudgment interest is a
question of state law.

Venn v. St. Paul Fire & Marine Ins. Co.,

99 F.3d 1058, 1066 (11th Cir. 1996).

Generally, under Florida

contract law 3, the “the prevailing party receives prejudgment
interest on its award.”

Blasland, Bouck & Lee, Inc. v. City of N.

Miami, 283 F.3d 1286, 1297 (11th Cir. 2002).

Prejudgment interest

is an element of pecuniary damages, and is based on the statutory
rate from the date of the liquidated loss until the entry of
judgment.

Argonaut Ins. Co. v. May Plumbing Co., 474 So. 2d 212,

214-215 (Fla. 1985).

When deciding to award prejudgment interest,

certain equitable factors may be considered, such as if the delay
between the injury and judgment is the fault of the prevailing
party, or if the party failed to mitigate its damages.

3Both

Blasland,

parties assume that the Credit Agreement is governed by
Florida law, and the Court will do the same.

9

Bouck & Lee, Inc. v. City of N. Miami, 283 F.3d 1286, 1297 (11th
Cir. 2002).
Irby seeks prejudgment interest on the entire unpaid balance
of $46,145.05, as of December 25, 2015, the last net due date
listed on the invoices.

However, the amount of liquidated loss

was not determined until January 10, 2017, after Irby exercised
its assigned rights against Brooks to reach a settlement for an
amount less than the total of the invoices.

The Court finds that

Irby is “equitably entitled to prejudgment interest only on the
net wrong it suffered, not the gross wrong.”

Blasland, Bouck &

Lee, Inc. v. City of N. Miami, 283 F.3d 1286, 1299 (11th Cir.
2002).

The prejudgment interest will only be applied to the

remaining balance as of January 10, 2017, as set off by the $40,000
payment by Brooks.
As established by Florida’s Chief Financial Officer 4, the per
annum interest rate as of January 1, 2017, was 4.97% or a daily
rate of .0001361644. 5

Applying this daily rate to the remaining

balance of $6,145.05, and then multiplying that sum by 329 days

4

Under Fla. Stat. § 55.03(1), it is the Chief Financial Offer
that sets the quarterly rates of interest.
5

https://www.myfloridacfo.com/Division/AA/Vendors/.

10

from January 10, 2017, through the date of this Opinion and Order,
the total is $275.29. 6
Attorney Fees
“Attorney’s fees incurred while prosecuting or defending a
claim

are

not

recoverable

in

the

absence

of

a

contractual agreement authorizing their recovery.”

statute

or

Port-A-Weld,

Inc. v. Padula & Wadsworth Const., Inc., 984 So. 2d 564, 568 (Fla.
4th DCA 2008) (citing Price v. Tyler, 890 So. 2d 246, 250 (Fla.
2004)).

See also Alyeska Pipeline Serv. Co. v. Wilderness Soc'y,

421 U.S. 240, 257 (1975).
Although a provision exists for a Guarantor to pay 20% of the
account balance as attorney’s fees and costs of collection, the
provision was not signed “below” by any individual, and Mr. Collins
is not individually named as a party to this suit.
provision

for

attorney’s

Conditions of Sale.

fees

is

contained

in

the

(Doc. #17-3, Exh. 3, pp. 3-4.)

Further, no
Terms

and

Finding no

statutory basis articulated, and no contractual basis shown, the
request for attorney’s fees will be denied.

6

Formula applied:
daily rate (.0001361644)
($6,145.05) = 0.8367 x 329 days = total.

11

x

balance

Post-Judgment Interest
Unlike

prejudgment

interest,

post-judgment

interest

is

calculated under federal law, and “shall be allowed on any money
judgment in a civil case recovered in a district court.”
§ 1961(a).

28 U.S.C.

The rate is computed daily, and compounded annually.

The Treasury constant maturities Nominal 1-year rate is 1.62% per
annum as of December 1, 2017, the week preceding the date of
judgment.

Applying this rate, multiplied by the principal amount

owing, and divided by 365 days, this results in a daily rate of
0.2407. 7
Accordingly, it is now
ORDERED:
1.

Plaintiff’s Motion for Summary Judgment (Doc. #75) is
GRANTED IN PART in favor of Irby and against BC Power.

2.

Plaintiff is awarded the Principal amount of $6,145.05;
Service charges in the amount of $8,875.37; Prejudgment
interest from January 10, 2017, through the date of this
Opinion and Order in the amount of $275.29; and Postjudgment interest from the date of the Judgment at the

7

Formula applied: Treasury Nominal 1-year percentage rate
(0.0162) x principal amount ($6,145.05) = $99.55/365 days = daily
rate (0.2727).

12

daily rate of 0.2727 until paid.

This provides a total

of $15,295.71, accruing at a daily post-judgment daily
rate of 0.2727 until paid.
3.

The request for attorney’s fees is DENIED.

4.

The Clerk shall enter judgment accordingly as set forth
in paragraphs 1 through 3, terminate all pending motions
and deadlines as moot, and close the file.

DONE AND ORDERED at Fort Myers, Florida, this
December, 2017.

Copies:
Counsel of record

13

5th

day of