Florida Dca Finds Res Judicata Prevented Lender From Refiling Breach Of Guarantee Claim Against Guarantor


Florida’s Fourth DCA recently reversed a final judgment entered in favor of Readycap Lending, LLC (“Readycap”) on its claim for breach of an unconditional guarantee against Dr. Jo Anne Daniels who guaranteed a business loan that was secured by a mortgage. Daniels v. ReadyCap Lending, LLC, No. 2D22-4106, 2024 WL 947611, at *1 (Fla. 4th DCA Mar. 6, 2024). Upon the borrowers’ payment breach, Readycap filed an action to foreclose its commercial mortgage and enforce the note.[i] Included in Readycap’s action was a claim against Dr. Daniels for breach of her unconditional guarantee of that note and her failure “to pay all amounts due under the note.”

In response to the claims raised against her in the complaint, Dr. Daniels asserted that Readycap failed to send her a pre-suit demand for payment thereby failing to satisfy a condition precedent to bringing suit, at least against her. On summary judgment, the trial court found there to be a genuine dispute on that issue and denied Readycap’s motion for summary judgment as to Dr. Daniels. Confusingly, even though the trial court “expressed concern about the issue relating to the written demand,” Readycap proceeded to trial and stipulated to the fact that it did not send a “written demand for payment” to Dr. Daniels prior to filing the action against her.

Not surprisingly, at trial the court found Readycap’s failure to send the pre-suit demand letter, a condition precedent to suing Dr. Daniels, fatal to Readycap’s claim. The Court entered judgment in Dr. Daniels’ favor. Readycap did not appeal the judgment. Instead, a month later, Readycap sent a written demand to Dr. Daniels for “payment of all amounts due under the note.”[ii] When Dr. Daniels failed to pay the demanded sum, Readycap filed its second breach of guarantee suit against her. This time, Dr. Daniels asserted Readycap’s claim was barred under the doctrine of res judicata. Under that doctrine, if a judgment is rendered on the merits “in a former suit between the same parties…upon the same cause of action” that judgment is “conclusive” as to every matter which was “offered and received to sustain or defeat the claim” as well as any matter that “might” have been litigated and determined in that action.[iii]

Both parties moved for summary judgment. The trial court granted Readycap’s motion  and entered a judgment finding Dr. Daniels breached her unconditional guarantee and was therefore liable for all sums due under the note. After a bench trial on damages the court entered a final judgment in favor of Readycap. Dr. Daniels appealed that judgment and won. In reversing the judgment, the Fourth DCA held that res judicata was applicable because Readycap “elected to proceed to trial [in the first lawsuit against Dr. Daniels] in the face of Dr. Daniel’s affirmative defense and ‘had a fair and full opportunity to plead and prove [its] cause of action’ for breach of the unconditional guarantee.”[iv]

The Court rejected Readycap’s argument that the written demand sent in the time between the two lawsuits prevented application of res judicata because the demand rendered the suits “different.” The Court refused to give Readycap a “second bite at the apple.” The result in Daniels demonstrates the importance of conducting an honest evaluation of one’s case prior to filing suit. This evaluation should include the ascertainment of the required elements of one’s claim and the evidence necessary to prove each element. In the event of an adverse ruling on summary judgment due to evidentiary deficiencies which cannot be cured prior to trial, the best practice is to cut one’s losses by dismissing and refiling so res judicata does not prevent the filing of a subsequent action.

[i] Daniels, at *1. All future references to this case are to this citation until indicated otherwise.

[ii] Daniels, at *2. All future references to this case are to this citation until indicated otherwise.

[iii] Daniels, at *2 (quoting Fla. Dep’t of Transp. v. Juliano, 801 So. 2d 101, 105 (Fla. 2001)).

[iv] Daniels, at *3. All future references to this case are to this citation.