The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
INNOVATIVE HEALING
SYSTEMS, LLC,
Plaintiff,
v. Case No. 8:25-cv-00048-WFJ-AEP
MIZELL MEMORIAL
HOSPITAL, INC.
Defendant.
/
ORDER
Before the Court is Plaintiff Innovative Healing Systems, LLC’s
(“Innovative”) Motion for Summary Judgment. Dkt. 44. Defendant Mizell Memorial
Hospital, Inc. (the “Hospital”) filed a response in opposition, Dkt. 50, and Innovative
replied. Dkt. 55. The Hospital also filed a Motion for Summary Judgment, Dkts. 46,
48,1 Innovative responded in opposition, Dkt. 53, and the Hospital replied. Dkt. 56.
Upon careful consideration, the Court grants Innovative’s Motion for Summary
Judgment and grants in part and denies in part the Hospital’s Motion for Summary
Judgment.
1 Defendant Hospital filed its Motion for Summary Judgment twice.
BACKGROUND2
This dispute centers around an alleged breach of contract between a hospital
and its hired consultant. Plaintiff Innovative is a consulting organization that assists
hospitals in opening and managing advanced wound care facilities. Dkt. 41-1 ¶ 3.
Innovative specializes in providing hyperbaric wound care. Id. ¶ 4. Hyperbaric
wound care, also known as hyperbaric oxygen therapy, is a medical treatment during
which patients breathe pure oxygen inside a pressurized chamber to enhance wound
healing. Id. ¶ 5. Because wounds require oxygen to heal properly, exposing them to
pure oxygen accelerates healing. Id. Defendant Hospital, located in Opp, Alabama,
is a private, not-for-profit, acute care facility. Dkt. 41-2 at 2, 5; Dkt. 47 ¶ 1. The
Hospital’s active medical staff consists of physicians and surgeons in family
practice, pediatrics, radiology, gynecology, and general surgery. See Dkt. 41-2 at 5.
I. The Wound Healing Institute Management Agreement
On October 23, 2019, the Hospital and Innovative entered into the Wound
Healing Institute Management Agreement (the “Agreement”). Dkt. 43 ¶ 6; Dkt. 47
¶ 3; see Dkt. 41-3 at 32:21–33:9; Dkt. 41-3 at 50–83 (showing the Agreement and
attachments). The Agreement memorialized the parties’ intent to establish an
outpatient “wound care center” on the Hospital’s campus. Dkt. 41-3 at 33:17-23; see
2 This factual background section is primarily derived from the parties’ statements of undisputed material facts. See
Dkts. 43, 47.
Dkt. 41-3 at 50 (“[The] Hospital desires to establish a comprehensive outpatient
WOUND HEALING INSTITUTE in a site located [on its campus].”).
Under the Agreement, the Hospital contracted with Innovative “to manage,
operate, and direct the clinical and business operations of [the] Hospital’s Wound
Care Program.” Dkt. 41-3 at 50. The Agreement also obligated Innovative to provide
the contemplated wound care services “in a stand-alone modular building to be
located on the Hospital premises” (the “Modular Building”). Id. at 57. The Hospital
agreed to “make available to [Innovative], at no charge, a portion of the land upon
which the Hospital is located . . . to permit [Innovative] to install” the Modular
Building (the “Allocated Space”). Id. The Agreement further obligated the Hospital
to “cooperate in any manner reasonably required by [Innovative] in obtaining all
permits, licenses, and any other authorizations necessary for the planning,
construction, and operation of the Modular Building.” Id. Innovative was
responsible for preparing the Allocated Space for the Modular Building’s installation
and for designing and installing the said building. Id. (showing section 4.3.4, which
states that “[Innovative] shall[] contribute up to $400,000.00” to prepare, design, and
install the Modular Building and the attached parking area). While the Agreement
was “contingent upon obtaining the necessary licensing, zoning, permitting, and (if
applicable) Certificate of Need for the project[,]” the Agreement did not contain any
deadline for the satisfaction of this contingency. Id. at 67.
Importantly, under section 7.2 of the Agreement, “[n]either party may
terminate this Agreement without cause before the expiration of the Initial Term.”
Id. at 59. In section 7.1.1, the Agreement defines the Initial Term as “commenc[ing]
on the opening day of” the Wound Healing Institute “and will continue for a period
of five (5) years thereafter.” Id. Section 7.2.1 further articulates that:
In the event of a termination of this Agreement by the Hospital during
the Initial Term of this Agreement that is not in compliance with this
subsection or where the Hospital is in breach of subsection 7.2.2, the
Hospital shall pay the following amounts to [Innovative], as
compensation and not as a penalty, and payment of such amount shall
be [Innovative’s] exclusive remedy for such termination during the
Initial Term of this Agreement:
(i) If this Agreement is terminated at any time after the
date of execution of this Agreement and on or prior to the
first anniversary of the [opening date of the Wound
Healing Institute], the Hospital shall pay [Innovative] a
termination fee in the amount of Nine Hundred Thousand
Dollars ($900,000).3
Id. at 59–60.
Section 7.2.2 of the Agreement governs termination for cause and enumerates
the circumstances that constitute cause. Id. at 60. The six circumstances that
constitute cause permitting the Hospital to terminate the Agreement are as follows:
(1) Innovative’s material breach, where the Hospital could terminate the Agreement
with written notice “following prior written notice of [Innovative’s] material breach
3 The Court refers to this $900,000.00-fee as the “Termination Fee” in this Order.
of any obligations [under the Agreement] (which notice shall set forth in detail the
nature of the breach), if such breach remains uncorrected for a period of thirty (30)
days after [Innovative’s] receipt of the initial written notice of default, or such longer
time as may be necessary if such breach cannot reasonably be cured within thirty
(30) days, so long as [Innovative] initiates efforts to cure the breach within such
thirty (30) day period and diligently pursues same to completion”; (2) Innovative
filing of a petition in bankruptcy; (3) the endangerment of the Hospital’s patients’ or
employees’ health and safety or the disruption of the Hospital’s business operations;
(4) Innovative’s breach of any representations or warranties set forth in Section 6 of
the Agreement; (5) Innovative’s employment of any Hospital staff without prior
approval from the Hospital during the term of the Agreement and for one year
following the expiration or termination of the Agreement; and (6) the inability to
obtain a bid for the Site Preparation Work that is mutually acceptable to both
Innovative and the Hospital. Id. at 60–61.
II. Innovative’s Performance under the Agreement
As relevant to this case, when an Alabama hospital undertakes a renovation
or construction project, the Alabama Department of Public Health (“ADPH”) must
approve the building plans before construction may begin. Dkt. 41-3 at 19:17–20:6.
As part of the ADPH’s approval process for any renovation or construction, the
ADPH requires a hospital to provide a Certificate of Need if a Certificate of Need is
required by law or some official documentation that a Certificate of Need is not
required by law. Id. at 20:7–21:10. Applications for Certificates of Need, as well as
requests for certification that a Certificate of Need is not required by law, are
processed by the State Health Planning and Development Agency (“SHPDA”). Id.
at 22:4-16.
Accordingly, to begin construction of the modular Wound Healing Institute,
Innovative and the Hospital needed to obtain a Certificate of Need (or some
certification that one was not required) from the SHPDA and ADPH approval of the
building plans for the project. Id. at 21:11–22:16; see also id. at 60:7-22 (noting that
until state approval was obtained, Innovative “couldn’t do anything”). The process
of obtaining ADPH approval of building plans is “a rather lengthy[,] specific
process.” Id. at 20:2-6. It is “not unusual” for it to “take several years” to obtain a
Certificate of Need if one is required. Id. at 23:6-10. Moreover, from March 2020
through 2021, the COVID-19 pandemic likely affected the speed of approvals by
Alabama state agencies. Id. at 23:11–24:20.
Following the execution of the Agreement on October 23, 2019, Innovative
avers that it began efforts to design and install the Modular Building. Dkt. 41-1 ¶ 8.
As part of these efforts, Innovative submitted preliminary plans for the project to the
ADPH, which received them on September 4, 2020. See id. ¶ 16; see also Dkt. 41-1
at 25 (showing ADPH acknowledging receipt of preliminary plans for the Modular
Building). Innovative also sent revised preliminary plans, which the ADPH received
on July 13, 2021. Dkt. 41-1 ¶ 16; see also Dkt. 41-1 at 29 (showing ADPH
acknowledging receipt of the revised preliminary plans). However, by June 2021,
the Wound Healing Institute still had not yet obtained approval from the ADPH.
Dkt. 41-1 ¶ 18.
III. Site Change for the Modular Building
While ADPH approval was pending, the Hospital’s former CEO, Kerry Goff,
decided in June 2021 to identify a different site on the Hospital’s campus for the
Modular Building than the Allotted Space the parties had originally agreed upon. Id.
¶ 19; Dkt. 41-4 at 27:21–29:22; Dkt. 41-4 at 44 (showing the Hospital’s board
meeting minutes on June 10, 2021). During this time, Innovative avers that it had
been communicating with the ADPH and making progress toward ADPH’s
approval, see Dkt. 52-1 ¶¶ 3–13, but the Hospital’s decision to change the site halted
any progress because any plans for a modular building on a different site would
require their own approval process. Dkt. 41-1 ¶ 20; Dkt. 41-3 at 29:6–31:13.
The Hospital did not propose an alternative location for the Modular Building
until March 2022. Dkt. 41-1 ¶ 21; Dkt. 41-1 at 33 (showing the Hospital’s board
meeting minutes on March 23, 2022, and discussing the “newly identified location”
for the Wound Healing Institute). The parties began negotiating an amendment to
the Agreement to reflect the site change, but they ultimately did not execute any
amendment. Dkt. 41-5 at 23:11-13.
On September 20, 2022, at a meeting of the Hospital’s board of directors, the
then-interim CEO of the Hospital, Michelle Sexton, acknowledged that Innovative
was “still working on state approval . . . .” Dkt. 41-4 at 25:14–26:8; Dkt. 41-4 at 40
(showing the Hospital’s board meeting minutes on September 20, 2022, and noting
“[Innovative is] still working on state approval but are at a standstill. There is not a
good out in the contract”). Nevertheless, the Hospital was seeking to get out of the
Agreement. See Dkt. 41-4 at 25:21–26:13 (“Q. So is it accurate that, as of September
2022, the hospital was trying -- was looking for an out for this contract? A. I think
it's fair that we had been -- we were already, what, three years in, and we were no
closer to getting -- it didn’t feel any closer to getting approval for the project.”); Dkt.
41-4 at 40. On November 3, 2022, Innovative’s representatives met with the
Hospital’s representatives, including interim CEO Sexton, to discuss advancing the
Wound Care Institute project forward. Dkt. 41-1 ¶ 22; Dkt. 43 ¶ 43.
IV. The Hospital’s Termination of the Agreement
On February 6, 2023, the Hospital’s board of directors received an email
drafted by interim CEO Sexton. Dkt. 41-3 at 44:10–45:1; Dkt. 41-3 at 84 (showing
February 6, 2023 email). In this email, Ms. Sexton expressed concern that the
Wound Healing Institute project “has been a huge worry of mine” and “could turn
out to be a continuous money loser for the [H]ospital.” Dkt. 41-3 at 84. But she
acknowledged that, concerning Innovative’s efforts to obtain state approval for the
project, Plaintiff was “on the right track now.” Id.
Among the litany of grievances with the project, Ms. Sexton noted that
Innovative had still not received state approval after several years; Innovative was
now attempting to amend the Agreement; Innovative’s “proforma” and lack of
market share data do not hold up to scrutiny; the business of providing hyperbaric
chambers has faced “increased regulation and payor resistance over the last few
years”; and the Agreement stated that the Hospital was responsible for paying supply
costs, which had “gone up substantially.” Id. While Ms. Sexton “had hope[d]
[Innovative] may choose to walk away” from the project, “[t]hat has not happened.”
Id.; see also Dkt. 41-3 at 45:20-25. As such, Ms. Sexton “recommend[ed] that [the
Hospital] walk away from th[e] project” and “try to negotiate a settlement with
[Innovative] to get out of the [Agreement],” but reminded the board that the
Agreement “left no provision for an ‘out’ clause.” Dkt. 41-3 at 84; see Dkt. 41-3 at
56:20–57:5.
Importantly, interim CEO Sexton never asserted that Innovative had breached
the Agreement. Indeed, the Hospital’s Rule 30(b)(6) representative acknowledged
that none of the circumstances listed by Ms. Sexton’s email constituted a breach of
the Agreement. Specifically, the Hospital acknowledged that ADPH never issued
any conclusive determination that the Wound Care Institute would never receive
approval and that it was possible that Innovative could obtain ADPH approval for
the project in the future. Dkt. 41-3 at 49:11–50:5; 62:3-6. The parties never executed
the requested amendment, and Innovative neither demanded nor required the
Hospital to execute it to continue the project. Id. at 51:1-18. Innovative’s projection
of the Wound Institute’s profitability not holding up to the Hospital’s scrutiny was
not a breach of the Agreement. Id. at 51:19–52:12. Likewise, Innovative’s failure to
produce market share data to support any financial proforma was not a breach of the
Agreement. Id. at 52:13–53:2. As to concerns about newer impediments to
profitability in the hyperbaric wound care business, this was not a breach of the
Agreement either. Id. at 53:3–55:5. Finally, despite Ms. Sexton’s concerns, the
Agreement plainly provided that the Hospital would pay for supply costs associated
with the project. Id. at 55:6–56:7.
On or about February 8, 2023, the Hospital terminated the Agreement. Dkt.
41-1 ¶ 23; Dkt. 43 ¶ 51; Dkt. 47 ¶ 14. The Hospital’s termination of the Agreement
did not involve the six circumstances that constitute cause under section 7.2.2: (1)
the Hospital never gave Innovative written notice of any material breach of the
Agreement or a thirty-day opportunity to cure any breach pursuant to section 7.2.2(i)
of the Agreement, Dkt. 41-3 at 38:21–39:12, 69:6–10; (2) Innovative never filed for
bankruptcy, id. at 39:20–24; (3) the Hospital never gave Innovative written notice
that its patients’ or employees’ health and safety was endangered or that its business
operations were disrupted, or a thirty-day opportunity to cure pursuant to section
7.2.2(iii) of the Agreement, id. at 39:25–40:16; (4) the Hospital did not give
Innovative written notice that Innovative breached any representation or warranty
set forth in section 6 of the Agreement or a thirty-day opportunity to cure any such
breach pursuant to section 7.2.2(v) of the Agreement, id. at 40:18-41:10; (5) the
Hospital did not terminate the Agreement on the grounds that Innovative had
employed Hospital staff during the term of the Agreement pursuant to section
7.2.2(vii), id. at 41:12-16; and (6) the Hospital did not give written notice that
Innovative failed to obtain a bid for Site Preparation Work that was mutually
acceptable to both the Hospital and Innovative pursuant to section 7.2.2(viii), id. at
42:19–43:2.
However, the Hospital did send Innovative a letter on October 5, 2022, before
the termination, informing Innovative that the Hospital had contacted the ADPH and
that the state agency told the Hospital that Innovative had not made any recent
submissions seeking state approval. Dkt. 47 ¶ 15; Dkt. 48-5 at 2 (showing October
5, 2022, letter from the Hospital to Innovative). The letter also reminded Innovative
that the Hospital “has been patient . . . as approvals are sought to build a wound care
center,” but “[o]ther opportunities have or will arise . . . and [the Hospital] needs to
know [Innovative’s] plans for the proposed wound care center.” Dkt. 48-5 at 3.
Following the termination of the Agreement, the Hospital never tendered the
Termination Fee to Innovative under section 7.2.1(i). Dkt. 41-1 ¶ 24; see Dkt. 41-3
at 59. Innovative’s Chief Financial Officer (“CFO”) avers that, before the Hospital
terminated the Agreement, Innovative incurred approximately $420,000.00 in direct
costs, including deposits for construction work and payments to surveyors,
architects, and attorneys, and approximately $500,000.00 in overhead expenses,
such as the time invested in the Wound Healing Institute by Innovative’s officers,
project developers, and human resources employees. Dkt. 41-1 ¶ 26.
V. Procedural History
On December 12, 2024, Innovative filed an action against the Hospital in
the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County,
Florida. Dkt. 1-1. In its Complaint, Innovative asserts a breach of contract claim
(Count I) and, in the alternative, an unjust enrichment claim (Count II) against the
Hospital. Id. The Hospital removed the action to this Court pursuant to 28 U.S.C.
§ 1332 on January 9, 2025. Dkt. 1.
Innovative now moves for summary judgment on its breach of contract
claim in Count I. See Dkt. 44. Innovative asserts that there is no genuine dispute
of any fact material to whether the Hospital breached the Agreement by
terminating the Agreement without cause and subsequently failing to pay
Innovative the Termination Fee. Id. at 1–2.
The Hospital also filed a motion for summary judgment, arguing that
Innovative’s breach of contract claim in Count I fails because the Hospital
properly terminated the Agreement for cause, and Innovative cannot show that it
was possible to obtain ADPH approval for the Wound Healing Institute. Dkt. 46
at 3. As to damages, the Hospital also argues that the Agreement’s language does
not entitle Innovative to the Termination Fee and, even if it does, that the
Termination Fee is unenforceable under Florida law as a penalty. Id. at 6–8.
Finally, the Hospital seeks summary judgment on Innovative’s unjust enrichment
claim in Count II, contending that the Agreement governs the parties’ relationship
and precludes Innovative from recovering under its alternative equitable theory of
unjust enrichment. Id. at 2.
LEGAL STANDARD
Summary judgment is only appropriate when there is “no genuine issue as to
any material fact [such] that the moving party is entitled to a judgment as a matter
of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Fed R. Civ. P. 56(a).
An issue of fact is “material” if it might affect the outcome of the case under the
governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). It is
“genuine” if the evidence could lead a reasonable jury to find for the non-moving
party. See id.; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986). The moving party has the burden of proving the absence of a
genuine issue of material fact, and all factual inferences are drawn in favor of the
non-moving party. See Allen v. Tyson Foods Inc., 121 F.3d 642, 646 (11th Cir.
1997); Pennington v. City of Huntsville, 261 F.3d 1262, 1265 (11th Cir. 2001)
(noting a court must “review the facts and all reasonable inferences in the light most
favorable to the non-moving party”). Once the moving party satisfies its initial
burden, it shifts to the non-moving party to come forward with evidence showing a
genuine issue of material fact that precludes summary judgment. Bailey v. Allgas,
Inc., 284 F.3d 1237, 1243 (11th Cir. 2002); Celotex, 477 U.S. at 324; Fed. R. Civ.
P. 56(e), (c). Speculation or conjecture cannot create a genuine issue of material fact.
Cordoba v. Dillard’s, Inc., 419 F.3d 1169, 1181 (11th Cir. 2005).
This standard is especially important when there are cross-motions for
summary judgment. “[C]ourts should be very careful in their analysis to ensure that
the proper party receives the benefit of the summary judgment standard.” FCOA
LLC v. Foremost Title & Escrow Servs. LLC, 57 F.4th 939, 959 (11th Cir. 2023).
“When parties jointly move for summary judgment, the court has three options:
granting summary judgment for the plaintiff under the defendant's best case, granting
summary judgment for the defendant under the plaintiff’s best case, or denying both
motions for summary judgment and proceeding to trial.” Id.
Additionally, a district court is only required to consider “the cited materials”
when deciding a summary judgment motion, Fed. R. Civ. P. 56(c)(3), and “[m]aking
district courts dig through volumes of documents and transcripts would shift the
burden of sifting from petitioners to the courts. . . . [D]istrict court judges are not
required to ferret out delectable facts buried in a massive record.” Chavez v. Sec’y
Fla. Dep’t of Corr., 647 F.3d 1057, 1061 (11th Cir. 2011). “[T]here is no burden
upon the district court to distill every potential argument that could be made based
on the materials before it on summary judgment. Rather, the onus is upon the parties
to formulate arguments; grounds alleged in the complaint but not relied upon in
summary judgment are deemed abandoned.” Solutia, Inc. v. McWane, Inc., 672 F.3d
1230, 1239 (11th Cir. 2012) (citing Resol. Tr. Corp. v. Dunmar Corp., 43 F.3d 587,
599 (11th Cir. 1995) (en banc)).
DISCUSSION
Based on a careful review of the record, the Court finds that Innovative is
entitled to summary judgment on its breach of contract claim because it has shown
that there is no genuine dispute that the Hospital terminated the Agreement without
cause and that Innovative incurred damages. This Order will proceed in two parts,
first considering Innovative’s motion for summary judgment on its breach of
contract claim, and then turning to the Hospital’s motion for summary judgment on
the enforceability of the Agreement’s liquidated damages provision and the unjust
enrichment claim.
I. Innovative’s Motion for Summary Judgment
The Court begins with Innovative’s arguments that it is entitled to summary
judgment on its breach of contract claim under Florida law.4 “The elements of a
breach of contract action are: (1) a valid contract; (2) a material breach; and (3)
damages.” Carl Domino, Inc. v. Dixon, 413 So. 3d 157, 167 (Fla. 4th DCA 2025)
(quoting J.J. Gumberg Co. v. Janis Servs., Inc., 847 So. 2d 1048, 1049 (Fla. 4th
DCA 2003)). The first element is undisputed, as both parties agree that the
Agreement is a valid contract. Dkt. 43 ¶ 6; Dkt. 47 ¶ 3. The Hospital, however,
argues that there is a genuine dispute about whether it breached the Agreement
without cause, whether it was even possible for Innovative to obtain ADPH
approval for the Wound Healing Institute, and whether Innovative is entitled to the
Termination Fee. Dkt. 50 at 2–8. The Court will address each argument in turn.
A. No Genuine Dispute as to the Hospital’s Material Breach
Based upon the evidence in the record, there is no genuine dispute that the
Hospital materially breached the Agreement by terminating the Agreement without
cause prior to the expiration of the Initial Term.
As an initial matter, there is no dispute that the Hospital’s termination of the
Agreement was a breach. Section 7.2.1 of the Agreement plainly states that
4 There is no dispute that Florida law applies to this breach of contract claim pursuant to the terms of the Agreement.
See Dkt. 41-3 at 66–67 (“The laws of the State of Florida shall govern the interpretation, construction, and legal effect
of this Agreement.”).
“[n]either party may terminate this Agreement without cause before the expiration
of the Initial Term.” Dkt. 41-3 at 59. Section 7.1.1 provides that the Initial Term
expires on the fifth anniversary of the Wound Healing Institute’s opening day. Id.
As such, a termination without cause prior to the fifth anniversary of the Wound
Healing Institute’s opening day would constitute a breach of the Agreement. In this
case, when the Hospital terminated the Agreement on February 8, 2023, the Wound
Healing Institute had not yet opened, and the Initial Term had not yet expired. Dkt.
43 ¶ 51; Dkt. 47 ¶ 14. Thus, there is no genuine dispute that the Hospital terminated
the Agreement, which Defendant admits in its response. See Dkt. 50 at 2.
The more fundamental question, however, is whether this was a material
breach. That is, whether the Hospital improperly terminated the Agreement without
cause. “When focusing on the breach of the contract, not every breach permits the
non-breaching party to cease performance. Instead, the failure to perform the
contractual obligation must be central to the contract or, in other words, material.”
Eclectic Synergy, LLC v. Seredin, 347 So. 3d 27, 29 (Fla. 4th DCA 2022) (citation
omitted). Indeed, “to rise to a material breach, a party’s conduct must ‘go to the
essence of the contract; it must be the type of breach that would discharge the injured
party from further contractual duty on his part.’” Id. (quoting JF & LN, LLC v. Royal
Oldsmobile-GMC Trucks Co., 292 So. 3d 500, 509 (Fla. 2d DCA 2020)).
Here, the Hospital points to section 7.2.2(i) of the Agreement, which allows
either party to “terminate[] for cause upon written notice of a material breach of the
other party’s obligations, if the breach is not cured (or attempts to cure have not
begun) within 30 days.” Dkt. 50 at 2 (citing Dkt. 41-3 at 60). But none of the other
circumstances in section 7.2.2 allowing the Hospital to terminate for cause are at
issue. See id. The Hospital’s corporate representative conceded as much in his
deposition. See Dkt. 41-3 at 39:14-43:14; Dkt. 43 ¶ 50.
The Hospital now contends its October 5, 2022, letter from its attorney to
Innovative was the “written notice” required under section 7.2.2(i). Id.; see also Dkt.
48-5 (showing the Hospital’s October 5, 2022, letter to Innovative). More
specifically, the Hospital reasons that it was Innovative’s obligation under the
Agreement to obtain ADPH approval for the Wound Healing Institute, and that the
letter put Innovative on notice that it had breached its obligations by failing to obtain
approval. Dkt. 50 at 2. The Court disagrees, as no reasonable jury could find that the
Hospital’s October 5, 2022, letter was a formal “written notice of the other party’s
material breach.” Dkt. 41-3 at 60.
Beginning with the text of the Agreement, section 7.2.2(i) provides that either
party may terminate the Agreement without penalty
upon written notice following prior written notice of the other party’s
material breach of any obligations hereunder (which notice shall set
forth in detail the nature of the breach), if such breach remains
uncorrected for a period of thirty (30) days after the breaching party's
receipt of the initial written notice of default, or such longer time as
may be necessary if such breach cannot reasonably be cured within
thirty (30) days, so long as the breaching party initiates efforts to cure
the breach within such thirty (30) day period and diligently pursues
same to completion.
Dkt. 41-3 at 60. But the Hospital’s October 2022 letter did not give Innovative notice
of a material breach for several reasons.
First, the letter never “set forth in detail the nature of the breach” since
Innovative never breached the Agreement in the first place. Id. It is undisputed that
the Agreement never gave Innovative a deadline for when all necessary licensing
and permitting for the project needed to be obtained. See Dkt. 41-3 at 67 (showing
section 11.2 only stating that “[t]his agreement is contingent upon obtaining the
necessary licensing, zoning, permitting, and (if applicable) Certificate of Need for
the project.”). As such, the Hospital’s letter expressing frustration with Innovative’s
lack of permitting and approval from the ADPH cannot constitute written notice of
a breach, as Innovative did not breach the terms of the Agreement.
Second, even a cursory review of the October 2022 letter shows that it does
not resemble a typical notice of default. Nowhere in the letter did the Hospital’s
attorney (who was also their Rule 30(b)(6) witness) identify the correspondence as
notice of a material breach of the Agreement under section 7.2.2(i). See generally
Dkt. 48-5. This is especially true given the significant delay caused by the Hospital’s
decision to change the Wound Healing Institute’s location, Dkt. 41-1 ¶¶ 19–21, and
their interim CEO stating that Innovative was “on the right track” towards state
approval for the new location. Dkt. 41-3 at 84.
When discussing Innovative’s failure to receive ADPH approval for the
project, the letter neither stated that the Agreement was contingent on state approval
nor informed Innovative that it was in breach of the Agreement for failing to obtain
ADPH approval. Indeed, the letter does not even mention the Agreement. Instead,
the Hospital’s attorney wrote that the “purpose of this letter is to ask for an update
on the plans that your clients . . . have to build, open, and run” the Wound Healing
Institute. Dkt. 48-5 at 2 (emphasis added). The letter further explained that the
Hospital’s current leadership felt underinformed about the project’s status because
the former CEO of the Hospital (Kerry Goff) had recently and suddenly resigned
and “left behind minimum documentation about any discussions, correspondence,
etc. that occurred with your clients.” Id. The letter ended by informing Innovative
that “[the Hospital] needs to know [Innovative’s] plans for the proposed wound care
center” and requesting “a detailed answer, with strict timelines, on what
[Innovative’s] plan is for moving forward.” Id. at 3. In short, the plain language of
the letter demonstrates that its purpose was to obtain an update on the project’s status
from Innovative, not to provide Plaintiff with written notice under section 7.2.2(i) of
a material breach of the Agreement. See Flagship Resort Dev. Corp. v. Interval
Intern., Inc., 28 So. 3d 915, 923 (Fla. 3d DCA 2010) (rejecting the plaintiff’s
argument that it provided a written notice of an intent not to renew the contract since
the language in the document actually indicated that the plaintiff was “willing to
engage in further negotiations concerning its continued relationship with” the
defendant).
Third, and perhaps most fatal to the Hospital’s position, is that Defendant’s
corporate representative admitted that the October 2022 letter did not constitute
notice of a material breach pursuant to section 7.2.2(i) of the Agreement. Dkt. 41-3
at 38:21–39:12 (“Q. Let me -- let me ask you this: is your what-the-heck-is-going-
on letter the same thing as providing notice to Innovative that they were in material
breach and that they had 30 days to cure right here? . . . A. It’s -- no, it doesn’t have
that language.”); see also id. at 69:6-10 (“Q. Okay. And again, nobody ever wrote,
did a letter to [Innovative] that set forth any material breaches, told them they needed
to cure, anything of that nature, correct? A. Not that I’m aware of. No, ma’am.”).
Moreover, the Hospital’s CFO, Jana Wyatt, testified that she was unaware of any
written notice of material breach given to Innovative by the Hospital. Dkt. 41-4 at
20:21–21:1. Similarly, as noted above, the Hospital’s interim CEO, Ms. Sexton, sent
an email to the Hospital’s Board of Directors on February 6, 2023, in which she
acknowledged that, concerning Innovative’s efforts to obtain state approval for the
project, Plaintiff was “on the right track now.” Dkt. 41-3 at 84.
Even when considering the evidence in the light most favorable to the non-
moving party, the Hospital’s attempt to characterize the October 5, 2022, letter as a
written notice of material breach under section 7.2.2(i) fails. On this record, no
reasonable jury could find that the Hospital properly terminated the Agreement for
cause. Therefore, the Court finds that the Hospital improperly terminated the
Agreement without cause prior to the expiration of the Initial Term, which
constitutes a material breach under Florida law.
i. Anticipatory repudiation affirmative defense
However, the Hospital contends summary judgment is still not warranted on
Innovative’s breach of contract claim since “Plaintiff cannot show it would have
been able to perform its own obligations under the [Agreement], as it is required to
do to succeed on that claim.” Dkt. 50 at 3. In other words, even if the Hospital
anticipatorily breached the Agreement, Innovative (as the non-breaching party) is
still not entitled to damages since it was unable to perform its obligations under the
Agreement. Id. at 4.5 The Court finds this affirmative defense does not preclude
summary judgment because the Hospital has not put forth any admissible evidence
5 The Hospital’s anticipatory repudiation argument is its eighth affirmative defense. See Dkt. 1-2 at 5. Where a party
bringing a claim for relief moves for summary judgment, the party opposing the claim must raise all arguments or
defenses that the opposing party believes preclude judgment on the claim in the moving party’s favor. Johnson v. Bd.
of Regents of Univ. of Ga., 263 F.3d 1234, 1264 (11th Cir. 2001). Thus, for an affirmative defense, the burden is on
the opposing party to bring evidence supporting the defense, not on the moving party to negate the existence of the
defense. Id. (citation omitted). Accordingly, the Court only considers the affirmative defenses that Defendant raises
in its response to Plaintiff’s motion for summary judgment. See Dkt. 50 at 3, 6–8.
that creates a genuine material dispute as to Innovative’s inability to perform under
the Agreement.
The Florida Supreme Court has explained that “[t]he holder of the duty based
upon a condition precedent cannot profit from an anticipatory repudiation of a
contract that he would have breached himself.” Hosp. Mortg. Group v. First
Prudential Dev. Corp., 411 So. 2d 181, 183 (Fla. 1982). In other words, “[i]n order
for an anticipatory breach of a contract to give rise to a claim for damages[,] the non-
breaching party must show its ability to perform conditions precedent to
performance by the breaching party.” Morley v. Trafalgar Developers of Florida,
Ltd., 455 So. 2d 391, 394 (Fla. 3d DCA 1984); see also Ryan v. Landsource Holding
Co., LLC, 127 So. 3d 764, 768 (Fla. 2d DCA 2013) (“To be entitled to damages
based upon an anticipatory breach, the nonbreaching party must establish its ability
to perform at the time of the breach.”).
Here, the Hospital points to no admissible evidence in the record to support
the assertion that the ADPH would never approve Innovative’s plans for the Wound
Healing Institute. The undisputed facts show that Innovative had been
communicating with the ADPH and making progress toward achieving state
approval, see Dkt. 43 ¶ 38, but the Hospital decided to change the site for the
Modular Building, and Innovative needed to wait until the Hospital identified a new
site before it could submit new plans to the ADPH for approval. Id. ¶¶ 20–21; Dkt.
52-1 ¶¶ 14–16 (showing sworn declaration from Innovative’s CFO David DeMik
stating that the site change halted progress towards ADPH approval since new plans
would be required). When the Hospital identified a new site for the Modular
Building in March 2022, the parties began to negotiate an amendment to the
Agreement to reflect the new location. See Dkt. 43 ¶ 40; Dkt. 52-1 ¶ 17. While the
parties discussed the proposed amendment to the Agreement, Innovative did not
order building plans or otherwise pursue the construction or installation of the
Modular Building. Dkt. 52-1 ¶ 18.
This delay, however, does not create a genuine factual dispute that Innovative
would never obtain ADPH approval for the Wound Healing Institute. Indeed, at the
time the Hospital decided to terminate the Agreement in February 2023, interim
CEO Sexton’s email to the Hospital’s board noted that, regarding efforts to obtain
state approval, Innovative was “on the right track,” albeit much slower than the
Hospital anticipated. Dkt. 41-3 at 84; see also Dkt. 41-5 at 14:13–15:21 (Ms. Sexton
testifying that it seems like Innovative “had a renewed focus on trying to get things
done” in 2023, and that “[m]aybe someone [at Innovative] had changed titles, or
someone had . . . a new position or some such thing, and [Innovative] really wanted
to see the project go through”); Dkt. 41-3 at 49:11–50:5, 62:3-6 (showing the
Hospital’s corporate representative acknowledging that ADPH never issued any
conclusive determination that the Wound Care Institute would never receive
approval and that it was possible that Innovative could obtain ADPH approval for
the project).
Despite this undisputed evidence, the Hospital points to its corporate
representative’s testimony that “it had been specifically informed by the State of
Alabama that [the State] would not approve a modular building to be part of a
hospital.” Dkt. 50 at 4 (citing Dkt. 41-3 at 27:2-24). The Court, however, cannot
consider such testimony, as any statement by an ADPH employee that a modular
building would not be approved is inadmissible hearsay.
The Eleventh Circuit has been clear that “[t]he general rule is that inadmissible
hearsay cannot be considered on a motion for summary judgment.” Jones v. UPS
Ground Freight, 683 F.3d 1283, 1293 (11th Cir. 2012) (citation omitted). But a court
may consider a hearsay statement “if the statement could be reduced to admissible
evidence at trial or reduced to admissible form.” Id. at 1293–94 (citation omitted).
“The most obvious way that hearsay testimony can be reduced to admissible form is
to have the hearsay declarant testify directly to the matter at trial.” Id. at 1294.
Here, the Hospital’s corporate representative, Gregg Everett, called the ADPH
and talked to someone named Tony Dunklin, who told Mr. Everett that:
[the ADPH] would not approve a modular building that -- to be part of
a hospital. And I ask [Mr. Dunklin] why. And he said, well, look where
it is. It’s on the Florida line. Hurricanes and tornadoes come through
there all the time. And we, we being [the ADPH], have concerns about
the safety of modular buildings when high winds occur. So I was told
by Tony more than once [that] they would not approve a modular
building as part of a hospital.
Dkt. 41-3 at 27:15-24. While this call with Mr. Dunklin may have happened, there
is no sworn declaration in this record from Mr. Dunklin or any other ADPH
employee that corroborates the truth of Mr. Everett’s testimony. As such, the
statement from Mr. Dunklin is hearsay because he did not make it under oath, the
Hospital offers the statement to prove the truth of the matter asserted (i.e., that no
ADPH approval would occur for a modular building), and no hearsay exception has
been identified. See Fed. R. Evid. 801(c) (“‘Hearsay’ means a statement that: (1) the
declarant does not make while testifying at the current trial or hearing; and (2) a
party offers in evidence to prove the truth of the matter asserted in the statement.”);
Johnson v. Spalding Cnty., Georgia, No. 24-13531, 2025 WL 1902434, at *2 (11th
Cir. July 10, 2025) (noting the plaintiff “cannot rely on [a sworn] declaration” that
has hearsay statements “unless she can show that both levels of hearsay would meet
an exclusion or exception to the hearsay rules”).
Nor has the Hospital provided evidence showing that Mr. Dunklin or any other
ADPH employee “will emerge and provide testimony on this point” at trial. Jones,
683 F.3d at 1294 (“The possibility that unknown witnesses will emerge to provide
testimony on this point is insufficient to establish that the hearsay statement could
be reduced to admissible evidence at trial.”); Johnson, 2025 WL 1902434, at *2
(citation modified) (“Johnson has provided no evidence that Perdue would testify,
so Johnson has only provided a suggestion that admissible evidence might be found
in the future, which is not enough to defeat a motion for summary judgment.”).
Therefore, the ADPH employee’s alleged statement is inadmissible hearsay, see Fed.
R. Evid. 802, and will not be considered when resolving the instant cross-motions
for summary judgment.
Besides this inadmissible portion of Mr. Everett’s deposition, the Hospital
fails to identify any other admissible evidence to rebut the undisputed evidence that
Innovative was still “on the right track” to obtain ADPH approval for the Wound
Healing Institute. Dkt. 41-3 at 84. Therefore, even when construing the evidence in
the light most favorable to the non-moving party, the Hospital’s anticipatory
repudiation affirmative defense does not preclude summary judgment on
Innovative’s breach of contract claim.
ii. The affirmative defenses of frustration of purpose and
impossibility do not excuse the Hospital’s breach
Next, the Hospital argues that Innovative’s breach of contract claim fails
because it was impossible to obtain ADPH approval for the Modular Building,
thereby frustrating the Agreement’s purpose. Dkt. 50 at 5–6; see also Dkt. 1-2 at 5
(showing the Hospital’s tenth affirmative defense as impracticability, impossibility,
and frustration of purpose). The Court disagrees. As discussed above, the Hospital
presents no admissible evidence showing that the ADPH would never approve the
Wound Healing Institute. Indeed, the Hospital’s response re-cites the same lines
from Mr. Everett’s deposition that the Court already rejected as inadmissible
hearsay. See Dkt. 50 at 5 (citing Dkt. 41-3 at 27:2-24).
More fundamentally, the Hospital may not rely on the equitable defenses of
impossibility, impracticability, or frustration of purpose because—contrary to the
Hospital’s assertion—the Agreement allocated the risk of failure to obtain ADPH
approval to Innovative, not the Hospital. Florida courts have noted that “[w]hile the
foreseeability of a business risk’s occurrence in the context of contractual defenses
is generally an issue of fact, summary judgment may be entered in a breach of
contract action where the business risk was expressly addressed by the parties’
agreement.” Vereit Real Estate, L.P. v. Fitness Int’l, LLC, 365 So. 3d 442, 449 (Fla.
3d DCA 2023) (citation omitted). As such, “if the agreement provides that a party
assumes the risk that a future event may prevent the party from performing a
contractual obligation, then the equitable defenses are unavailing in an action
alleging the party’s breach for non-performance.” Id. (citation omitted).
Here, the terms of the Agreement show that Innovative assumed the risk of
ADPH denying approval for the Wound Healing Institute. In the event of a denial
by the State, the Hospital would have been free to terminate the Agreement for cause
and without penalty, while Innovative would have lost its investment in the project
and lacked any means to recover it. See Dkt. 41-3 at 57, 60–61, 67. The Hospital
resists this conclusion, arguing that the contingency provision in section 11.2 did not
allocate the risk of ADPH denying approval to either party. Dkt. 50 at 7. While
technically true when reading section 11.2 in isolation, the Florida Supreme Court
has repeatedly warned that “[p]rovisions in the texts of . . . contracts cannot be
viewed in isolation from the full textual context of which they are a part.” Allstate
Ins. Co. v. Revival Chiropractic, LLC, 385 So. 3d 107, 113 (Fla. 2024). When
reading the contingency and termination-for-cause provisions together, it is clear
that Innovative had the responsibility to seek ADPH approval to build the Modular
Building, and a denial by the State would allow the Hospital to terminate the
Agreement for cause. See Dkt. 41-3 at 57, 60–61, 67. As a result, the Agreement
allocates the risk of state approval to Innovative.
The fact that Innovative bore the risk of ADPH approval is significant, as the
Hospital did not terminate the Agreement because ADPH denied approval. Instead,
the Hospital terminated the Agreement because the Hospital determined that the
Wound Healing Institute “could turn out to be a continuous money loser for the
[H]ospital.” Dkt. 41-3 at 84. Indeed, in support of her recommendation that the
Hospital “walk away from” the Wound Healing Institute project, interim CEO
Sexton told the board that “[Innovative] has failed to gain the appropriate state
approvals for the project. I think they are on the right track now[,] but alot [sic] of
time and money has been wasted on a seemingly simple task,” and “[w]e need to
focus our resources on other things right now.” Id. She also expressed concerns
about future supply costs to the Hospital and possible reimbursement limits or
reductions for this type of wound care. Id.
In other words, the record shows that the Hospital terminated the Agreement
before Innovative obtained a final determination from ADPH because the Hospital
believed the Wound Healing Institute would be less profitable than originally
anticipated, and that the approval process was becoming expensive6 and time-
consuming. See id. (listing grievances about the Wound Healing Institute project,
including the fact that the hyperbaric chamber business “has faced increased
regulation and payer resistance over the last few years”). Thus, the Court finds that
the Hospital cannot rely upon the equitable defenses of impossibility,
impracticability, or frustration of purpose under these circumstances. Valencia Ctr.,
Inc. v. Publix Super Markets, Inc., 464 So. 2d 1267, 1269 (Fla. 3d DCA 1985)
(noting that “courts are reluctant to excuse performance that is not impossible but
merely inconvenient, profitless, and expensive”); Home Design Ctr. Joint Venture
v. Cnty. Appliances of Naples, Inc., 563 So. 2d 767, 769–70 (Fla. 2d DCA 1990)
(“As a general rule, a contract is not invalid, nor is the obligor discharged from its
binding effect, because the contract turns out to be difficult or burdensome to
perform.”).
6 Notably, the project was not expensive for the Hospital. The Agreement did not require the Hospital to contribute
funds for obtaining ADPH approval or construction of the Wound Healing Institute until after the Wound Healing
Institute’s opening day. See Dkt. 41-4 at 19:3–20:12, 26:9-13; Dkt. 41-5 at 11:5-12.
Nor can the Hospital argue that circumstances beyond either party’s control
frustrated the purpose of the Agreement, where the Hospital terminated the
Agreement before any true frustration arose. See BRE Mariner Marco Town Ctr.,
LLC v. Zoom Tan, Inc., 682 F. App’x 744, 747–48 (11th Cir. 2017). Because the
Agreement expressly addressed and allocated the risk of failure to obtain ADPH
approval to Innovative, the Hospital may not rely on the equitable defenses of
impossibility, impracticability, or frustration of purpose to defeat summary
judgment.
B. No Genuine Dispute as to Damages
The third and final element of Innovative’s breach of contract claim is that it
suffered damages. See Carl Domino, 413 So. 3d at 167. The Court finds that there
is no genuine dispute that Innovative has suffered damages due to the Hospital’s
breach and failure to tender the Termination Fee. Specifically, Innovative’s CFO
avers that Innovative’s performance of the Agreement prior to the Hospital’s breach
caused Plaintiff to incur direct expenses and corporate overhead costs that cannot be
recovered. Dkt. 41-1 ¶ 26; Dkt. 41-1 at 18–23. On the other hand, the Hospital does
not provide any evidence, much less any disputed material evidence, that it rebuts
Innovative’s sworn declaration from its CFO. Consequently, because the Hospital
terminated the Agreement without cause and failed to pay the Termination Fee,
Innovative has suffered $900,000.00 in damages under the Agreement’s liquidated
damages provision. See Dkt. 41-3 at 59–60; see also Lefemine v. Baron, 573 So. 2d
326, 328 (Fla. 1991) (“It is well settled that in Florida the parties to a contract may
stipulate in advance to an amount to be paid or retained as liquidated damages in the
event of a breach.”).7
However, the Hospital disputes Innovative’s claim to the Termination Fee as
a result of the Hospital’s breach. Pointing to the language in section 7.2.1 of the
Agreement, the Hospital argues that Innovative can only recover the Termination
Fee if the Hospital terminates the Agreement without cause during the Initial Term,
that is, after the Wound Healing Institute’s opening day. Dkt. 50 at 4–5 (quoting Dkt.
41-3 at 59). In response, Innovative maintains that the Hospital’s argument ignores
section 7.2.1(i), Dkt. 55 at 4–5, which states: “If this Agreement is terminated at any
time after the date of execution of this Agreement and on or prior to the first
anniversary of the” opening date of the Wound Healing Institute, the “Hospital shall
pay [Innovative] a termination fee in the amount of Nine Hundred Thousand Dollars
($900,000).” Dkt. 41-3 at 59–60.
It is well-settled Florida law that courts are required “to read provisions of a
contract harmoniously in order to give effect to all portions thereof.” City of
Homestead v. Johnson, 760 So. 2d 80, 84 (Fla. 2000). As such, “[w]henever
7 As discussed in further detail below, when addressing Defendant’s motion for summary judgment, the Court also
finds that the liquidated damages provision is enforceable under Florida law and not due to be stricken as a penalty
clause. See Lefemine, 573 So. 2d at 328 (outlining the two-pronged test “as to when a liquidated damages provision
will be upheld and not stricken as a penalty clause”).
possible, we must give each word and provision effect and avoid an interpretation
that renders any term superfluous.” Paraiso CU-1, LLC v. PRH Paraiso Four, LLC,
414 So. 3d 271, 275 (Fla. 3d DCA 2025); see also Morgan v. State, 295 So. 3d 833,
836 (Fla. 4th DCA 2020) (citation modified) (“Under the harmonious-reading
canon, there can be no justification for needlessly rendering provisions in conflict if
they can be interpreted harmoniously. . . . The purpose for this canon is to make the
provisions of the statutory text be interpreted in a compatible, not contradictory
manner.”).
Here, applying these canons of construction, the Agreement entitles
Innovative to recover the Termination Fee. If the Court accepted the Hospital’s
interpretation that Innovative can only recover the Termination Fee if the Hospital
terminated the Agreement “during the Initial Term,” then the subsequent language
in section 7.2.1(i) about “terminat[ion] at any time after the date of execution of this
Agreement” would be rendered superfluous. Dkt. 41-3 at 59–60. The Court declines
this incongruent reading and instead interprets sections 7.2.1 and 7.2.1(i) in harmony
with each other. See Morgan, 295 So. 3d at 836. The Court interprets text of the
Agreement to create two instances where the Hospital must pay a termination fee:
(1) the Hospital must pay a termination fee if it terminates the Agreement without
cause “during the Initial Term” (i.e., the five year period after the Wound Healing
Institute opens), and (2) if the Hospital terminates the Agreement without cause “at
any time after the date of execution of this Agreement and on or prior to the first
anniversary of the” opening date of the Wound Healing Institute. Dkt. 41-3 at 59–
60. The undisputed facts show that the second instance applies since the Hospital
terminated the Agreement without cause after the contract was signed but before the
Wound Healing Institute opened. See Dkt. 41-1 ¶ 23; Dkt. 43 ¶ 51; Dkt. 47 ¶ 14.
Therefore, the Agreement entitles Innovative to recover the Termination Fee from
the Hospital under section 7.2.1(i).
Accordingly, the Court grants Innovative’s motion for summary judgment on
its breach of contract claim in Count I against the Hospital.
II. The Hospital’s Motion for Summary Judgment
Turning to the Hospital’s motion, Defendant repeats many of the same
arguments it made in its response to Plaintiff’s motion for summary judgment.
Specifically, the Hospital reiterates that the material breach element has not been
established since the Agreement was “properly terminated the contract for cause,”
and Innovative “cannot show it was able to fulfill its own obligations under the
Management Agreement.” Dkt. 46 at 3–5. The Court has already previously
addressed these meritless arguments and incorporates by reference its prior
discussion on these points. However, the Hospital’s motion advances a new
argument that Innovative has failed to establish the damages element of its breach
of contract claim because “it is an unenforceable penalty” under Florida law. Id. at
6–8.
The Court finds that the Hospital has failed to meet its initial (summary
judgment) burden showing that the liquidated damages provision is unenforceable
under Florida law. As mentioned above, “parties to a contract may stipulate in
advance [] an amount to be paid or retained as liquidated damages in the event of a
breach.” Lefemine, 573 So. 2d at 328 (citation omitted). Florida courts apply a two-
prong test to determine whether “a liquidated damages provision will be upheld and
not stricken as a penalty clause.” Id. (citation omitted). “First, the damages
consequent upon a breach must not be readily ascertainable.” Id. “Second, the sum
stipulated to be forfeited must not be so grossly disproportionate to any damages that
might reasonably be expected to follow from a breach as to show that the parties
could have intended only to induce full performance, rather than to liquidate their
damages.” Id. If a liquidated damages clause satisfies these conditions, the clause is
enforceable unless “it is unconscionable in light of circumstances existing at the time
of the breach.” Dade Nat’l Dev. Corp. v. Southeast Invs. of Palm Beach Cnty., Inc.,
471 So. 2d 113, 117 (Fla. 4th DCA 1985) (citing Hutchison v. Tompkins, 259 So. 2d
129, 132 (Fla. 1972)). The Court will address each prong in turn.
A. Innovative’s Potential Damages Were Uncertain at the Time the
Parties Executed the Agreement
At the time the parties entered into the Agreement, the damages Innovative
would suffer if the Hospital terminated the Agreement prematurely were not readily
ascertainable. The Florida Supreme Court has already recognized that it may be
difficult, even for sophisticated parties, to calculate damages for a breach of a
complex business relationship, like one involving profit-sharing or future
performance, the cost of which is difficult to quantify in advance. See Hawk’s Cay
Inv., Ltd. v. Brandy Marine of the Keys, 524 So. 2d 681, 684 (Fla. 4th 1988)
(concluding that the non-breaching party’s damages were not readily ascertainable
at the time the parties entered into the agreement where the agreement provided that
the non-breaching party would share in the future net profits of the breaching party’s
business). Florida courts also recognize certain factors a party might consider in
attempting to determine their expected loss, including “time . . . ; the restriction upon
the use of capital; the inability to enter into other investments during the course of
this project; expenses for architectural, engineering, and legal consultation; expenses
for the services of buyer’s personnel; and loss of anticipated profits.” Dade Nat’l
Dev. Corp., 471 So. 2d at 116.
Here, the Agreement memorialized a complex business relationship between
Innovative and the Hospital, with Innovative assuming significant business risk by
investing time, resources, and human capital in the construction and management of
the Wound Healing Institute, while the Hospital’s upfront cost only required
allocating land for the Modular Building. Compare Dkt. 41-3 at 51–57 (showing
Innovative’s standards of performance, regulatory compliance, and duties under the
Agreement), with Dkt. 41-3 at 57 (showing the Hospital’s duties, including
allocating the space upon which the Wound Healing Institute would be built).
Innovative asserts, and the Hospital does not challenge, that Termination Fee was
supposed to compensate Plaintiff for its “architectural, engineering, and legal
consultation fees; expenses for the work on the project performed by Innovative’s
personnel; the loss of Innovative’s anticipated profits; and the restriction on the use
of Innovative’s capital pending the recovery of its investment after the Wound
Healing Institute’s opening.” Dkt. 53 at 14; see Dkt. 52-1 ¶ 19. The Hospital also
does not dispute that Plaintiff’s quantification of these expenditures was uncertain
at the time the parties signed the Agreement. See Dkt. 56 at 4 (showing Defendant
only addressing the grossly disproportionate prong, not the readily ascertainable
prong). Given this uncertainty, there is no formulaic calculation that could have more
fairly anticipated Innovative’s damages.
Similarly, the Agreement required Innovative to perform in the future, which
was difficult to quantify in advance. The time and resources required to obtain
ADPH approval could not have been precisely anticipated, as the Hospital’s
corporate representative testified that the ADPH approval process could take
between two months and a year. Dkt. 41-3 at 22:21–23:10. He also testified that the
COVID-19 pandemic “most definitely” affected the time it took the ADPH to
approve projects through 2021. Id. at 23:11–24:10. Nor could Innovative have
known that the Hospital would make a site change for the Wound Healing Institute
two years after the parties executed the Agreement. See Dkt. 52-1 ¶¶ 14–16.
The Agreement further provided that the Hospital would compensate
Innovative for its investment in and construction and management of the Wound
Healing Institute by sharing a percentage of the net revenue. See Dkt. 41-3 at 75
(showing attachment 5.1, which states Innovative’s management fee will be twenty-
five percent of the net revenue from the Wound Healing Institute). Because the
Wound Healing Institute’s future net revenue was uncertain, the amount of
Innovative’s damages was not readily ascertainable at the time the parties entered
into the Agreement. See Hawk’s Cay Inv., Ltd., 524 So. 2d at 684 (noting that while
the contract allocated a percentage of profits between the parties, the “future share
of profits was not” readily ascertainable). Therefore, because the Hospital’s motion
has totally failed to address this first prong, see Dkt. 46 at 7–8, the Court finds that
the Hospital has failed to carry its initial burden of proving the absence of a genuine
issue of material fact.
B. The Termination Fee Is Not Disproportionate to Innovative’s Actual
Loss.
Concerning the second prong, the Termination Fee is not grossly
disproportionate to any damages that might reasonably have been expected to follow
from the Hospital’s breach before the first anniversary of the Wound Healing
Institute.
Where a court finds that the liquidated damages amount is not
disproportionate to the non-breaching party’s damages, it errs in not awarding the
liquidated damages amount. RKR Motors, Inc. v. Associated Unif. Rental & Linen
Supply, Inc., 995 So. 2d 588, 595 (Fla. 3d DCA 2008) (citation omitted) (“Unless
the trial court found that the imposition of the liquidated damages amount would be
‘unconscionable,’ it was required, pursuant to prevailing law, to award the liquidated
damages amount. . . . Thus, the trial court erred in not awarding the liquidated
damages amount where it concluded that the liquidated damages amount was not
disproportionate to the actual lost profits.”).
Here, Innovative’s CFO attested that Plaintiff incurred $920,000.00 in direct
costs and overhead expenses in performing under the Agreement. Dkt. 43 ¶ 56; see
also Dkt. 41-1 ¶ 26; Dkt. 41-1 at 18–23 (showing Innovative’s invoices for various
expenses). Innovative’s CFO did not consider Innovative’s potential lost profits in
calculating this sum. Dkt. 43 ¶ 56. The Termination Fee is not disproportionate or
unconscionable because Innovative suffered actual losses in an amount roughly
equal to the Termination Fee. See RKR Motors, Inc., 995 So. 2d at 595; see also
Bayshore Royal Co. v. Doran Jason Co. of Tampa, Inc., 480 So. 2d 651, 655 n.3
(Fla. 2d DCA 1985) (noting that “[c]ases declaring liquidated damages clauses to be
unlawful penalties typically involve a liquidated damages amount which is
disproportionately larger than the amount of potential actual damages”).
Notably, the termination provisions of the Agreement also appear to reflect
the parties’ consideration of the speculative risk that Innovative assumed by entering
into the Agreement. While the Hospital was not required to contribute any financial
investment to the Wound Healing Institute before its opening, Innovative was
required to contribute up to $400,000 toward the design and installation of the
Modular Building and would be repaid only from a portion of the Wound Healing
Institute’s future net revenue. Dkt. 41-3 at 57 (showing section 4.3.4). To reflect the
disproportionate nature of the parties’ investment early in the relationship, the
Agreement provided that the Termination Fee would decrease each year the Wound
Healing Institute remained open. Id. at 59–60. In other words, section 7.2.1(i)-(v)
acknowledges that Innovative’s actual loss resulting from the Hospital’s termination
of the Agreement without cause would decrease the longer the Wound Healing
Institute remained open and collecting revenue. Id. (showing termination fees
decreasing from $900,000 to $500,000). The Agreement likely would not have such
a provision if the Termination Fee were designed as a penalty. Thus, the second
element of Florida’s standard for enforceable liquidated damages provisions is
satisfied, and the Termination Fee is enforceable under Florida law.
The Hospital’s reply, however, argues that the affidavit from Innovative’s
CFO “provides no specification at all as to what the remaining claimed damages
consist of, and thus absolutely no way for either Mizell or this Court to evaluate
whether the claimed damages are accurate or properly recoverable.” Dkt. 56 at 4.
While the Hospital is correct that the CFO’s affidavit is somewhat sparse, no
evidence contests it. It is the Hospital’s initial burden—as the moving party on
summary judgment—to come forth with evidence showing the absence of a material
fact on this issue, Allen, 121 F.3d at 646. And the portion of the Hospital’s motion
addressing the second prong fails to cite anything from the record. See Dkt. 46 at 7–
9. Nor does the Hospital provide any facts or data from the record to support its view.
Instead, the Hospital only makes conclusory, unsworn arguments that “[n]o
reasonable person would expect that Plaintiff would incur $900,000 in damages
before approval to begin construction,” id. at 8, which is insufficient when moving
for summary judgment. See Celotex, 477 U.S. at 323 (citation modified) (noting the
movant’s initial burden consists of a “responsibility [to] inform[] the district court
of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of
material fact”).
Therefore, because the Hospital’s motion has failed to satisfy its initial burden
on summary judgment as to whether the Termination Fee is permitted under Florida
law, the Court denies the Hospital’s motion as to this portion of the breach of
contract claim in Count I. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11th
Cir. 1993) (“If the party moving for summary judgment fails to discharge the initial
burden, then the motion must be denied and the court need not consider what, if any,
showing the non-movant has made.”).
C. Count II—Unjust Enrichment Claim
Finally, the Court need not spend much time on Innovative’s unjust
enrichment claim. While a plaintiff can “simultaneously allege the existence of an
express contract and alternatively plead a claim for unjust enrichment,” Real Estate
Value Co., Inc. v. Carnival Corp., 92 So. 3d 255, 263 n.2 (Fla. 3d DCA 2012)
(citation omitted), “a plaintiff cannot pursue a quasi-contract claim for unjust
enrichment if an express contract exists concerning the same subject matter.”
Diamond “S” Dev. Corp. v. Mercantile Bank, 989 So. 2d 696, 697 (Fla. 1st DCA
2008). Here, there is no dispute that there was an express contract between the parties
and that the breach of contract claim in Count I involved the same subject matter as
the unjust enrichment claim in Count II. See Dkt. 43 ¶ 6; Dkt. 47 ¶ 3. Indeed,
Innovative admits that its unjust enrichment claim is pleaded in the alternative to its
breach of contract claim. Dkt. 53 at 4; see Dkt. 1-1 at 5. As discussed above, the
Court already found in Innovative’s favor on its breach of contract claim in Count I;
therefore, the Court grants the Hospital’s motion for summary judgment on Count II
since Innovative’s unjust enrichment claim fails as a matter of law.
CONCLUSION
Accordingly, it is hereby ORDERED and ADJUDGED that:
1. Plaintiff Innovative’s Motion for Summary Judgment, Dkt. 44, is GRANTED
as to the breach of contract claim in Count I.
2. Defendant Mizell Memorial Hospital’s Motion for Summary Judgment, Dkts. 46,
48, is DENIED in part and GRANTED in part. Defendant’s motion is only
GRANTED as to the unjust enrichment claim in Count II and DENIED in all
other respects.
3. The Clerk is directed to ENTER final judgment in favor of Plaintiff Innovative
Healing Systems, LLC on Count I against Defendant Mizell Memorial Hospital,
Inc. in the amount of $900,000.00.
4. The Clerk is also directed to TERMINATE all deadlines and CLOSE this case.
DONE AND ORDERED in Tampa, Florida, on March 5, 2026.
/s/ William F. Jung__________________
WILLIAM F. JUNG
UNITED STATES DISTRICT JUDGE
COPIES FURNISHED TO:
Counsel of Record