Appeals court sides with DEO in contract case
Florida's 1st District Court of Appeal


A Florida appeals court has largely upheld a ruling for the Department of Economic Opportunity (DEO) in a case involving a low-interest loan program for the state’s small businesses.

A three-judge panel of the 1st Circuit Court of Appeal on Monday sided with DEO on a summary judgment in a suit brought by the Black Business Investment Fund of Central Florida.

The panel did reverse on one point, ordering an award of pre-judgment interest.

Trial courts grant summary judgments when there are no important facts in dispute and one side is entitled to prevail as a matter of law.

Circuit Judge Kevin Carroll of Tallahassee had granted such a judgment to DEO in a case related to the Economic Gardening Business Loan Pilot Program, created by lawmakers in 2009 as a response to the then-ongoing recession.

The program set aside “$8.5 million to provide low-interest loans to small businesses around the state,” the decision said. The investment fund was picked as a loan administrator.

The loan program allowed administrators to get a loan origination fee, payable at closing, of 1 percent of each loan and to take a yearly “servicing fee” of 0.625 percent of a loan’s outstanding principal balance, the ruling said.

But DEO soon told the fund it misunderstood the calculations and demanded it return fees and money not yet loaned.

The investment fund didn’t comply and the agency sued on breach of contract and conversion claims. Conversion is broadly defined as a civil-law form of theft, or wrongly taking someone else’s property or money for one’s own use.

The lower court granted summary judgment, awarding $1.1 million in damages to DEO. The appellate panel agreed, finding the fund incorrectly charged a monthly fee of 0.625 percent, rather than an annual fee of the same rate.

“We note, however, that confusion regarding the correct calculation of the servicing fee was understandable in light of various actions” by DEO and its predecessor agency, the Office of Tourism, Trade, and Economic Development, the opinion said.

It mentioned some agency memos that in fact referred to charging the fee in question monthly. But those actions didn’t rise to the level of a ruling for the fund, the court said.

The panel included Chief Judge Clay Roberts, and Judges Stephanie Ray and Brad Thomas.

Jim Rosica

Jim Rosica is the Tallahassee-based Senior Editor for Florida Politics. He previously was the Tampa Tribune’s statehouse reporter. Before that, he covered three legislative sessions in Florida for The Associated Press. Jim graduated from law school in 2009 after spending nearly a decade covering courts for the Tallahassee Democrat, including reporting on the 2000 presidential recount. He can be reached at


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