879 F. Supp. 2d 1320
M.D. Fla.2012Background
- LSQ Funding Group, a Florida-based factoring firm, purchased Homeland invoices under a Factoring and Security Agreement with Homeland.
- Between Apr 30, 2007 and Oct 1, 2007, LSQ sent about 30 email exchanges to Defendant’s program manager, leading to payment of Homeland invoices.
- In Jan 2008 Defendant learned Homeland submitted 35 fraudulent invoices; Homeland later went out of business in 2010.
- Plaintiff initially sought the face value of 35 fraudulent invoices ($610,995.09) plus fees and interest; Homeland had paid LSQ $263,380.
- In April 2008, parties agreed Homeland could repay the fraud via continued work and withholdings from Defendant’s payments.
- Plaintiff filed suit against Defendant for breach of contract (and related theories); the court granted in part Plaintiff’s summary judgment on breach of contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did no-offset emails form a valid contract requiring payment of invoices? | Groupe argues mutual assent to pay is present. | Insufficient mutual assent to a term obligating payment for fraudulent invoices. | Mutual assent exists; contract formed. |
| Is parol evidence admissible to challenge mutual assent or a condition precedent? | Parol evidence should be admissible to show conditions or assent. | Parol evidence bars or contradicts the written terms. | Parol evidence barred; terms unambiguous; no condition precedent allowed. |
| Was there valid consideration supporting the contract? | Consideration flowed from funding of Homeland’s invoices and related arrangements. | No consideration since services for fraudulent invoices were not provided. | Sufficient consideration supported the contract. |
| Was there mutuality of obligation? | Performance occurred and consideration fixed obligations. | Lack of mutuality makes contract illusory. | Mutuality satisfied; not a defense to enforceability. |
| Are damages limited by setoffs for Homeland payments? | Plaintiff entitled to full face value of fraudulent invoices. | Setoffs reduce damages by Homeland payments and other amounts. | Plaintiff entitled to full face value; setoff arguments untenable; prejudgment interest/fees to be addressed. |
Key Cases Cited
- Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009) (contract elements; mutual assent principles)
- State v. Family Bank of Hallandale, 623 So.2d 474 (Fla. 1993) (mutual assent as prerequisite to contract formation)
- Robbie v. City of Miami, 469 So.2d 1384 (Fla. 1985) (integration of terms; implied contract formation when terms stated)
- Real Estate World Fla. Commercial, Inc. v. Piemat, Inc., 920 So.2d 704 (Fla. 4th DCA 2006) (consideration and contract terms; fidelity to contract language)
- BMW of N. Am., Inc. v. Krathen, 471 So.2d 585 (Fla. 4th DCA 1985) (clear contract language; no construction where terms unambiguous)
- Jenkins v. Eckerd Corp., 913 So.2d 43 (Fla. 1st DCA 2005) (integration clause; effect on parol evidence when not ambiguous)
- Drane v. SunBank, Nat’l Ass’n, 596 So.2d 1122 (Fla. 5th DCA 1992) (drafter rule; ambiguity when contract terms contradict)
- Langford v. Paravant, Inc., 912 So.2d 359 (Fla. 5th DCA 2005) (contract interpretation; plain meaning; not construed against drafter)