Merco Group at Akoya v. General Computer Services
237 So. 3d 1052
Fla. Dist. Ct. App.2017Background
- Merco Group (developer) and General Computer Services (GCS) entered a September 2003 contract for GCS to supply the BeCruising computer/information system for condominium units at the Akoya development; an addendum addressed equipment ownership, location, and exclusive promotion.
- Contract provisions: GCS supplies systems and software; Merco agrees to promote/exclusively market the system through its salesforce and collect payments; specified per-unit price ($3,900 software), hardware costs, and commission structure (client commission $1,000; salesperson $200); cancelled-sales credit back to GCS.
- Addendum limited removal/use of demo equipment, required client protection of equipment, and expressly required the client to ‘‘promote exclusively’’ the BeCruising System in the Akoya building.
- Before trial the parties stipulated that unit owners and potential purchasers were not obligated to purchase the BeCruising system; GCS later objected to the stipulation being read to the jury.
- At trial the court construed the contract to require Merco to sell a system for each condominium unit (entitling GCS to damages measured by units × price) and excluded or limited evidence and the stipulation bearing on whether owners were obligated to buy and on actual sales; jury awarded GCS $1,360,800 on breach of contract.
- The appellate court reviews contract construction de novo and evidentiary rulings for abuse of discretion; it reversed and remanded for a new damages trial, holding the trial court incorrectly construed the contract and wrongly excluded relevant evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper construction of contract terms: whether Merco guaranteed sale/payment for a system for every unit | Contract obligates Merco to provide/pay for a BeCruising System for each condominium unit (basis for per-unit damages) | Contract requires exclusive promotion and best efforts to sell, but does not guarantee sales or payment for unsold units | Merco did not guarantee sale/payment for every unit; contract requires promotion/best efforts, not absolute obligation to buy |
| Admissibility of pretrial stipulation that owners were not obligated to buy | Stipulation should be excluded as irrelevant to damages under court’s construction | Stipulation is relevant to damages because no guaranteed per-unit obligation exists | Trial court abused discretion excluding the stipulation; it was relevant to damages under proper contract construction |
| Limiting testimony about how many systems actually sold | Evidence of sales numbers irrelevant if Merco guaranteed per-unit payment | Sales figures are relevant to damages because contract does not impose guaranteed per-unit liability | Trial court abused discretion in limiting testimony about actual sales |
| Need for new trial on damages | Verdict and damages calculation proper under court’s prior rulings | Erroneous contract construction and evidentiary exclusions warrant new trial on damages | Reversed and remanded for new trial on damages (breach of contract claim only) |
Key Cases Cited
- NCP Lake Power, Inc. v. Fla. Power Corp., 781 So. 2d 531 (Fla. 5th DCA) (interpretation of contract is a question of law reviewed de novo)
- Linde v. Linde, 199 So. 3d 1102 (Fla. 3d DCA) (evidentiary rulings reviewed for abuse of discretion)
- Therrien v. Larkins, 959 So. 2d 365 (Fla. 5th DCA) (contracts and addenda read together and construed as a whole)
- Merco Grp. at Akoya, Inc. v. Gen. Comput. Servs., 45 So. 3d 971 (Fla. 3d DCA) (prior appeal addressing default judgment and remand for damages)
- LPI/Key West Assocs., Ltd. v. Beachcomber Jewelers, Inc., 77 So. 3d 852 (Fla. 3d DCA) (stipulations are encouraged and binding absent good cause to withdraw)
- Lopez v. Dublin, 489 So. 2d 805 (Fla. 3d DCA) (party seeking relief from pretrial stipulation must show good cause)