00-3410 ARISON V. COBB

SUPREME COURT CASES

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State: Florida

Court: Florida Southern District Court

Docket No: 3d00-3410

Case Date: 01/16/2002

Plaintiff: 00-3410 ARISON

Defendant: COBB

Preview:NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF.
IN THE DISTRICT COURT OF APPEAL OF FLORIDA THIRD DISTRICT JANUARY TERM, 2002
MICKY ARISON and  **
NATIONSBANK, N.A.,  **
Appellants,  **
vs.  CASE NO. 3D00-3410
**
COBB PARTNERS, LIMITED, EASTERN AIRLINES, INC.,  **  LOWER TRIBUNAL NO. 99-11443
PHILLIP FROST, M.D., HERSHEL SMITH, JR., and FROST PAN  **
INVESTMENT CORPORATION,  **
Appellees.

Opinion filed January 16, 2002.
An Appeal from a final order from the Circuit Court from Miami-Dade County, Gisela Cardonne, Judge.
Gilbride, Heller & Brown, Lewis N. Brown and Dyanne E. Feinberg, for appellants.
Colson Hicks Eidson, Dean Colson, Marc Cooper, and Maureen E. Lefebvre, for appellee Cobb Partners, Limited.
Zuckerman Spaeder, Thomas J. Meeks, Walter J. Tache, and Ronald B. Hauser, for appellees Phillip Frost, M.D. and Frost Pan Investment Corporation.
Marlow, Connell, Valerius, Abrams, Adler & Newman and Robert
B. Fitzsimmons, for appellee Hershel Smith, Jr.
Before GODERICH and SHEVIN, JJ., and NESBITT, Senior, Judge.
GODERICH, Judge.
The plaintiffs, Mickey Arison and NationsBank, N.A., appeal from an adverse Amended Final Judgment. We affirm.
On July 28, 1997, NationsBank entered into a Credit Agreement with Carnival Air Lines, Inc., n/k/a Pan American Airways Corp. [Pan American Airways] and Pan Am Corporation [Pan Am].  The Credit Agreement established two separate loan facilities.  The first, Revolving Credit Facility A [Facility A] had a maximum borrowing availability of $12,500,000, that was later reduced to $7,500,000. The second, Revolving Credit Facility B [Facility B] had a maximum borrowing availability of $12,500,000.
Section 2.3 of the Credit Agreement provided that any monies received in payment of the Credit Agreement would first be applied to Facility B and then to Facility A.  The Credit Agreement also provided that it and any other loan document may be amended, but only if such amendment was in writing and signed by Pan Am and NationsBank. The provision stated:
Any provision of this Agreement or any other Loan Document may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower, Pan Am and the Lender; . . . .
At the time that the Credit Agreement was executed, Arison executed an Individual Guaranty and Suretyship Agreement wherein he personally guaranteed collection of the amounts drawn on Facility
B. Arison did not personally guarantee the collection of Facility
A.
By late 1997, Pan Am and Pan American Airways had drawn on all amounts available under Facility A and Facility B and desired to increase the maximum borrowing availability.  As a result, on or about December 11, 1997, NationsBank, Pan Am, and Pan American Airways entered into a Consolidated Amendment to the Credit Agreement which provided for Credit Facility C with a borrowing availability of up to $5,000,000.
The Consolidated Amendment expressly provided for an order of
repayment and amended Section 2.3 of the Credit Agreement as
follows:
Except as provided in Section 2.6 and Section 10.5 principal payment shall first be applied to the payment of Revolving Credit Facility B, then to Revolving Credit Facility C, and finally to Revolving Credit Facility A.
Section 2.6(a), as amended in the Consolidated Amendment,
provided:
Each such reduction [in principal] shall be in the aggregate amount of $100,000 or such greater amount which is an integral multiple of $10,000, or the entire remaining Total Revolving Credit Commitment, and shallpermanently reduce first Revolving Credit Facility B, then Revolving Credit Facility C, and finally Revolving Credit Facility A.
Section 10.5(a) of the Credit Agreement remained unchanged by the Consolidated Amendment and provided that, in the event of default, certain administrative fees and expenses were to be paid
first, then interest due on all the credit facilities, and then
principal on the credit facilities.  Specifically, section 10.5(a)
stated:
Allocation of Proceeds. (a) If an Event of Default has occurred and not been waived, and the maturity of the Notes has been accelerated pursuant to Article X hereof, all payments received by the Lender hereunder, in respect to any principal of or interest on the Obligations or any other amounts payable by the Borrower hereunder, shall be applied by the Lender in the following order:
(i)
amounts due to the Lender pursuant to Sections 2.8, 3.3, 3.4, and 11.5; [various fees and expenses]

(ii)
payments of interest on Loans and Reimbursement Obligations;

(iii)payments of principal of Loans and Reimbursement  Obligations; . . .
On the same day, December 11, 1997, Arison executed a Second
Individual Guaranty and Suretyship Agreement for collection of
Facility C.
On December 12, 1997, Pan Am's shareholders, Eastern Airlines,
Inc. [Eastern], Phillip Frost, M.D. and Frost Pan Investment
Corporation [Frost Pan], Hershel Smith, Jr., and Cobb Partners,
Limited [Cobb Partner] [referred to collectively as "Indemnitors"],
entered into an indemnification agreement with Arison with respect
to Facility C.  Section 1 of the Indemnification Agreement
provided, in relevant part:
(A) Each Indemnitor absolutely, unconditionally and irrevocably agrees to indemnify and reimburse Guarantor for and from any and all amounts expended from time to time by Guarantor in excess of Guarantor

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