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

BLACK BUSINESS                      NOT FINAL UNTIL TIME EXPIRES TO
INVESTMENT FUND OF                  FILE MOTION FOR REHEARING AND
CENTRAL FLORIDA, INC.,              DISPOSITION THEREOF IF FILED

      Appellant,                    CASE NO. 1D14-3971

v.

STATE OF FLORIDA,
DEPARTMENT OF ECONOMIC
OPPORTUNITY,

     Appellee.
_____________________________/

Opinion filed November 9, 2015.

An appeal from the Circuit Court for Leon County.
Kevin J. Carroll, Judge.

Henry G. Gyden of Gyden Law Group, Tampa, for Appellant.

Robert N. Sechen, General Counsel, Stephen S. Everett, Assistant General
Counsel, State of Florida, Department of Economic Opportunity, Tallahassee, for
Appellee.




THOMAS, J.

      This appeal comes to us on the trial court’s entry of a summary judgment

against Appellant in favor of Appellee, State of Florida, Department of Economic

Opportunity (the Agency), with respect to the Agency’s claims of breach of
contract and conversion, and the trial court’s denial of Appellant’s motion for

summary judgment.         Appellant contends that the trial court erred in its

interpretation of both the contract Appellant entered into with the Agency’s

predecessor and with section 288.1081(5)(d), Florida Statutes (2009). Appellant

further argues that the trial court erred by finding that its affirmative defenses and

counterclaims were barred by either the contract or by sovereign immunity.

Appellant also appeals the trial court’s determination of the start date for purposes

of calculating prejudgment interest.1 As discussed below, we affirm the trial

court’s order denying Appellant’s motion for summary judgment in all respects,

except for the award of pre-judgment interest effective July 1, 2011.

                                 Factual Background

      In response to the economic crisis prevailing in 2009, the Legislature

enacted the “Economic Gardening Business Loan Pilot Program” (EGBLPP) and

allocated $8.5 million to provide low-interest loans to small businesses around the

state. In relevant part, the enacting statute provided:

      A loan administrator is entitled to receive a loan origination fee,
      payable at closing, of 1 percent of each loan issued by the loan
      administrator and a servicing fee of 0.625 percent per annum of the
      loan's outstanding principal balance, payable monthly. During the
      first 12 months of the loan, the servicing fee shall be paid from the
      disbursement from the Economic Development Trust Fund, and
      thereafter the loan administrator shall collect the servicing fee from

1
  Appellant’s appeal of this judgment was assigned case number 1D15-302. By
order of this court, both appeals were consolidated for all purposes.
                                          2
        the payments made by the borrower, charging the fee against
        repayments of principal.

§ 288.1081(5)(d), Fla. Stat. (2009) (footnote omitted) (emphasis added).

        Appellant was chosen by Appellee’s predecessor agency2 to administer

EGBLPP. In relevant part, the contract between the parties provided:

        Section 2 –Scope of Work
        GRANTEE shall be entitled to receive loan origination fee, payable at
        closing of one percent (1%) of each loan issued by GRANTEE and a
        monthly servicing fee of 0.625 percent per year of the loan’s
        outstanding principal balance, payable monthly.

(Emphasis added.)

        After the contract was signed in August 2009, Appellant began making loans

and deducting its monthly servicing fee of 0.625% of the outstanding principal

balance of each loan. Eventually, the Agency informed Appellant that the fee was

payable at an annual rate of 0.625%, payable in twelve monthly installments (or

0.052%). The Agency demanded that Appellant return all fees retained in excess

of approximately $49,000 and any funds not loaned or subject to a loan agreement

reached by June 30, 2011.

        The Agency filed a breach of contract and conversion complaint after

Appellant failed to comply with this demand. Appellant responded by denying any

breach or conversion, arguing that its interpretation of how to calculate the fee was

correct, and asserting various affirmative defenses and filing a counterclaim for,

2
    The Office of Tourism, Trade, and Economic Development (“OTTED”).
                                         3
inter alia, equitable relief.

       Both parties moved for summary judgment, and the trial court agreed with

the Agency’s interpretation of the statute and contract, and found that Appellant’s

equity claims were barred by either the contract or sovereign immunity. The court

awarded damages of nearly $500,000 on the breach of contract action, and nearly

$600,000 for the conversion claim. The court also awarded interest, including pre-

judgment interest. The court found that the pre-judgment interest award was to run

from July 1, 2011, the date after which no new loans were allowed pursuant to

section 288.1081(9), and which also provided that any unexpended funds as of that

date were to revert to the State.

                                         Analysis

                                Summary Judgment - Estoppel

       “Summary judgment is proper if there is no genuine issue of material fact

and if the moving party is entitled to a judgment as a matter of law. Thus, our

standard of review is de novo.” Volusia County v. Aberdeen at Ormond Beach,

L.P., 

, 130 (Fla. 2000) (citation omitted).

       We agree with the trial court that both the statute and the contract provide

for an annual servicing fee of 0.625%, payable in twelve monthly installments.

Although a committee report and staff analysis concerning the loan program

clearly stated that loan administrators for the program were to be paid a servicing

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fee of 0.625% per month, the final version of the bill signed into law provided for

an annual fee of 0.625% rather than a monthly fee in that amount.3 How this came

to be is pure speculation, but, as the trial court found, the statute is not ambiguous;

thus, this court cannot deviate from the plain text. See Daniels v. Fla. Dep't of

Health, 

, 64 (Fla. 2005) (“When the statute is clear and unambiguous,

courts will not look behind the statute's plain language for legislative intent or

resort to rules of statutory construction to ascertain intent.”). Likewise, because

the contract language is substantially similar to that of the statute it was intended to

implement, the same result is required.

      We note, however, that confusion regarding the correct calculation of the

servicing fee was understandable in light of various actions by OTTED and the

Agency. This confusion, however, did not rise to the level necessary to establish a

claim for equitable estoppel. See Hoffman v. State, Dep’t of Mgmt. Servs., Div. of

Ret., 

, 166 (Fla. 1st DCA 2007).

      In order to demonstrate estoppel, Appellant must show that: (1) the Agency

represented a material fact contrary to its later asserted position; (2) Appellant

relied on the Agency’s earlier representation; and (3) Appellant changed its



3
  In fact, in his presentation in support of the program, the then-director of the
OTTED explained that the plan included a provision for a third-party loan
administrator that would be compensated with a “1% administration fee, plus 0.625
percent monthly servicing fee.” [sic].
                                         5
position, to its detriment, due to the Agency's representation and its reliance

thereon. See 

.

      Here, the Agency’s insistence that both it and the OTTED have consistently

construed both the contract and the statutory language to provide for an annual fee

of 0.625% is not supported by the record. For example, in August 2010, an

internal “transition” memorandum explained that the loan administrator was

entitled to a 1% origination fee “and a monthly servicing fee of 0.625% of the

loans [sic] outstanding balance.”     Another internal memorandum, this one

generated as late as July 2012, acknowledged an audit was performed in mid-2010

which included a review of invoices Appellant submitted and showed that

Appellant was charging fee amounts consistent with a 0.625% monthly fee, and

that the Agency did not object. But, fatal to Appellant’s argument, there is no

evidence that either the Agency or OTTED explicitly represented to Appellant that

the fee was calculated at the monthly rate of 0.625%. At most, Appellant relies on

an ambiguous email from the Agency’s contract administrator which, in response

to an equally ambiguous inquiry, replied that the fee was payable as provided by

the contract and statute.

      We acknowledge that Appellant’s contractual duties extended beyond

simple loan servicing, a fact the Agency has also acknowledged. The contract

specifically referred to the business plan Appellant submitted as part of its

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application to administer the program, which required that Appellant use the loan

funds consistent with the purposes of the program “as outlined in the business

plan.” In that plan, Appellant indicated that it would provide a variety of services

to promote and effectuate the program’s goals, including providing financial and

technical assistance, education, business development services, workshops, buying

newspaper advertisements, and participation in business trade shows. Also, in its

October 2009 monthly update, Appellant informed the Agency that Appellant had

developed a website “with program information & application download,” and that

Appellant had contracted “for the development of EGL program lending policies

and guideline procedures.”

      The Agency’s position is that Appellant was to provide all of these services

and service over $8 million in loans in exchange for a $1,000 origination fee and

an annual fee of 0.625% of the principal balance for each loan. The Agency

contends that this was adequate for Appellant to “recover its costs,” despite being

informed by the only other entity that the Agency chose to administer the program

that this compensation was not sufficient, because the costs associated with loan

closures were also included in that fee.

      Despite this, according to the Agency’s calculations, Appellant was entitled

to a servicing fee of less than $50,000 to recover its costs for providing all of the

aforementioned services during the first year of the program. But the Agency did

                                           7
not tell Appellant about this calculation on April 10, 2012, just three days after

Appellant informed the Agency that “for the first year of the program, the total

expense was approximately $463,828.67 of which $333,918.30 was billed leaving

an uncollected balance of $129,910.37.”

      Thus, while it may be understandable that Appellant erroneously assumed it

was entitled to a monthly servicing fee of 0.625%, “[e]quitable estoppel is applied

against a state agency only in exceptional circumstances and must include some

positive act on the part of a state officer upon which Appellant had a right to rely

and did rely to her detriment.” 

. Here, although the

Agency enjoyed the multitude of services Appellant provided for what turned out

to be a fee insufficient to cover its costs, and failed to inform Appellant of its

mistake regarding the fee amount it had been collecting after the Agency received

its mid-2010 audit, this inaction did not rise to the level of a positive act required to

expose the Agency to potential liability under the equitable estoppel doctrine.

      Therefore, under Article II, section three, of the Florida Constitution, we are

constrained to affirm the trial court’s summary judgment as to the substantive

issues raised, regardless of whether we find that the clear statutory text providing

for an annual fee of 0.625% is either fair or equitable, as that decision is solely

within the Legislature’s domain. See e.g., Pepper v. Pepper, 

, 284

(Fla. 1953) (holding “[f]or the Judicial Department of the Government to attempt

                                           8
. . . to amend or modify an Act of the Legislature would constitute an unlawful

encroachment by the Judiciary on the Legislative powers . . . .”).     This leaves,

therefore, the issue of when prejudgment interest began to accrue.

                               Prejudgment Interest

      A trial court’s decision concerning entitlement to prejudgment interest is

reviewed de novo. Berloni S.P.A. v. Della Casa, LLC, 

, 1011 (Fla.

4th DCA 2008). The trial court found for the Agency on its conversion claim,

finding that, pursuant to section 288.1081(9), Appellant was no longer authorized

to make any loans or enter into any loan agreements after June 30, 2011, and any

unexpended funds were to revert to the state’s general revenue fund.

      Section 288.1081(9), Florida Statutes (2009), provides:

      Unexpended balances of appropriations provided for the pilot program
      shall not revert to the fund from which the appropriation was made at
      the end of the fiscal year but shall be retained in the Economic
      Development Trust Fund and be carried forward for expenditure for
      the pilot program during the following fiscal year. A loan
      administrator may not award a new loan or enter into a loan
      agreement after June 30, 2011. Balances of appropriations provided
      for the pilot program which remain unexpended as of July 1,
      2011, shall revert to the General Revenue Fund.

(Emphasis added.)

      The applicable portion of the parties’ contract provides that

      following termination of this Agreement, all funds which as of that
      date were previously provided by [Appellee] and not expended by
      GRANTEE shall revert to the State of Florida General Revenue Fund.
      The requirement for the return or/and method of repayment of
                                         9
       any remaining funds shall be at the sole discretion of [Appellee].
       Further, [Appellee] may recover the Funds awarded to GRANTEE by
       payment of the amount from GRANTEE [i]n total, or, if all of the
       Funds have been disbursed, by collection of loan payments or
       investment returns as the loans or investments mature (that is,
       [Appellee] and not GRANTEE shall be entitled to collect the
       receivables, subject to any rights of others).

(Emphasis added.)

       The plain language of the statute provides for a deadline after which no

further loans are authorized and designates where any unexpended funds “shall” go

(the General Revenue Fund) after that date (i.e., a future action). As the trial court

found, the statute does not indicate that unexpended funds are deemed to be

automatically allocated as of July 1, 2011. Rather, the statute provides for the

ultimate destination of any unexpended funds once returned. Thus, for purposes of

determining the actual date on which entitlement to prejudgment interest begins,

this statute is not dispositive.

       The parties’ contract provision quoted above, however, is relevant to this

determination. As with the statute, the contract provides that funds unexpended as

of the contract’s termination are to revert, but the contract also provides the

Agency with discretion as to whether repayment is required, and how repayment is

to be accomplished. Thus, before Appellant became liable for repayment, some

communication from the Agency was necessary informing Appellant that the

contract was terminated (whether because of a breach or because of the passing of

                                         10
the statutory deadline), repayment was required, how much repayment was due,

and how to transfer the funds.

      Notably, in its April 10, 2012, demand letter, the Agency tracked the

contract’s language, informing Appellant that it was “requiring repayment of

$575,781.25 that [Appellant] is holding in reserve.” In its sole reference to the

statute, the Agency notes only that no loans or loan agreements were allowable

after June 30, 2011. The letter does not state that Appellant must return the funds

on July 1, 2011; rather, in addition to acknowledging that it was aware that

Appellant was holding the funds in reserve, Appellee demanded repayment within

fourteen days, and instructed that “[p]ayment shall be made by check or money

order . . . .” That is, as per the contract, it informed Appellant of the method of

repayment.

      A conversion claim is based on a “‘positive, overt act or acts of dominion or

authority over the money or property inconsistent with and adverse to the rights of

the true owner.’” Columbia Bank v. Turbeville, 

, 969 (Fla. 1st

DCA 2014) (quoting S.S. Jacobs Co. v. Weyrick, 

, 250 (Fla. 1st

DCA 1964). In Turbeville, this court held that a bank’s allegations were sufficient

to allege conversion when the bank pled that the defendant “intentionally engaged

in unauthorized conduct when she (a) withdrew funds from the accounts at issue”

depriving Ms. Pueschel of her ‘immediate right to possess the funds’ and (b) failed

                                        11
to return the funds upon demand.” 

Generally, before a

conversion can occur, a party that was previously in rightful possession of another

party’s funds must be informed by the other party that: 1) continued possession of

the funds is no longer permitted; 2) a demand for return of the funds is necessary;

and 3) the party holding the funds must fail to comply with the demand.

      Here, as noted, the Agency’s demand letter at least implicitly acknowledged

that Appellant’s retention of the funds at issue after July 1, 2011, was consensual,

when the Agency addressed Appellant’s retention of the funds in its reserves. The

Agency did not assert that Appellant’s possession of those funds after that date was

in any way improper.

      The Agency relies on Lumbermens Mutual Casualty Co. v. Percefull, 

(Fla. 1995), for the proposition that the type of action upon which the

prevailing party obtains judgment determines when the award of prejudgment

interest starts to accrue. It is noteworthy that in Percefull, however, the contract

provision at issue provided: “Benefits payable under this Policy for any loss . . .

will be paid immediately upon receipt of due written proof of such loss.” 

(emphasis supplied). Thus, pursuant to the contract, payment was due upon notice,

and it was in this context that the supreme court in Percefull found that

prejudgment interest was due, as the insurer in that case failed to pay benefits when




                                         12
it received the required proof of loss. Here, the contract also contains a notice

provision, and payment was not due until that notice was given.

      Applying the foregoing, therefore, the earliest date on which the Agency’s

entitlement to pre-judgment interest began was the date it demanded return of the

unexpended funds Appellant had in its reserves – April 10, 2012. Thus, we reverse

the trial court’s judgment to the extent it provides for pre-judgment interest

payable starting July 1, 2011.

                                   Conclusion

      For the reasons explained above, we affirm the final summary judgment in

the Agency’s favor and the trial court’s order denying Appellant’s summary

judgment motion, but reverse the final summary judgment to the extent it provides

for prejudgment interest commencing July 1, 2011, and remand with instructions to

amend the judgment consistent with this opinion.

      AFFIRMED in part, REVERSED in part, and REMANDED.

ROBERTS, C.J., and RAY, J., CONCUR.




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