SUPREME COURT OF FLORIDA

Transcription

1 SUPREME COURT OF FLORIDA STEPHEN and DONNA RICHARDS, Appellants, v. Case No. SC Case No. 4D L.T. Case No CA03 MARILYN and ROBERT TAYLOR, Appellees. / An Appeal from the Fourth District Court of Appeal, APPELLANTS JURISDICTIONAL BRIEF Attorneys for Appellants HATCH & DOTY, P.A. Ira C. Hatch, Esq Highway A1A, Suite 220 Vero Beach, Florida Fax ihatch@hatlaw.com Florida Bar No

2 TABLE OF CONTENTS TABLE OF CONTENTS ii TABLE OF CITATIONS iii STATEMENT OF THE CASE AND OF THE FACTS...1 SUMMARY OF THE ARGUMENT...3 ARGUMENT: I. ARGUMENT I - THE LOWER COURT S HOLDING THAT THE RICHARDS MUST HAVE A BINDING LOAN COMMITMENT IN ORDER TO PROVE THEY WERE ABLE TO CLOSE EXPRESSLY AND DIRECTLY CONFLICTS WITH SEVERAL CASES FROM OTHER DISTRICTS AND THIS COURT...5 II. ARGUMENT II-BY RE-EVALUATING THE EVIDENCE AND SUBSTITUTING ITS JUDGEMENT FOR THE TRIAL COURT S JUDGMENT, THE LOWER COURT S DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH SEVERAL CASES FROM OTHER DISTRICTS...9 CONCLUSION CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE WITH FONT REQUIREMENTS ii

3 TABLE OF CITATIONS FLORIDA CASES: Brand v. Florida Power Corp., 633 So.2d 594 (Fla 1 st DCA 1994)... 4,9 Edelstein v. Wilder, 198 So. 2d 665 (Fla. 3 rd DCA 1966)... 4,6 F.R. v. Children and Family Services, 763 So. 2d 478 ( Fla. 5 th DCA 2000)... 4,9 Hollywood Mall, Inc. v. Capozzi, 545 So.2d 918 (Fla. 4th DCA 1989)...5,6,7,8,9 Manufacturers Nat. Bank of Hialeah v. Canmont Intern., Inc., 322 So. 2d 565,(Fla. 3 rd DCA 1965)... 5,9 Perper v. Edell, 160 Fla. 477, 35 So.2d 387 (Fla. 1948)... 4,6,7 Sisco v. Rotenberg, 104 so 2d. 365, 375 (Fla. 1958)... 4,7,8 Stevens v. Cricket Club Condominiium, Inc., 784 So.2d 517, (Fla 3 rd DCA 2001)... 5,9 Wilson v. Odom, 215 So.2d 37 (Fla. 1 st DCA 1968)... 4,8 FLORIDA RULES: Fla. R. App. P (a)(2)(A)(iv)... 3,10 Fla. R. App. P (D)...3 iii

4 STATEMENT OF THE CASE AND FACTS On or about August 2004, the Appellants, Stephen Richards and Donna Richards ( Richards ) as purchasers and the Appellees Robert and Marilyn Taylor ( Taylors ) as sellers entered into a contract for the purchase of a condominium located in Indian River County, Florida In September 2004, Hurricanes Frances and Jeanne both came ashore in the Treasure Coast, causing damage to the Taylors condominium. After the hurricanes, the Richards notified the Taylors that their lender, Bank of America, would not allow closing until all of the damage had been repaired. The Taylors responded that representatives of the lender could inspect the condominium and they offered 3% of the assessed value of the property pursuant to Standard O of the contract. At that time the parties also mutually agreed to rescheduled the closing for October 22, The contract provided that if the condominium was damaged before closing and cost of restoration exceeded 3% of the assessed valuation, the Richards had the option of canceling the contract and receiving their deposit or closing with a credit equal, at the option of the Richards, to (i) three percent of the assessed valuation or (ii) the insurance proceeds payable by virtue of the damage. On October 15, 2004, Donna Richards and the Bank of America s representative inspected the condominium. They observed that the condominium had suffered 1

5 extensive damage. On that same day, the Richards notified the Taylors by letter that they intended to settle and close on the property, but that they first needed information to determine how to exercise their rights under Standard O of the contract. Despite their request, the Taylors never supplied the Richards with the requested information. Because they were concerned that the repairs might not be timely completed as required by Bank of America, the Richards made alternative arrangements to finance the purchase of the condominium. They contacted a long-time friend, Ken Becker ( Becker ), and requested that he grant them a mortgage loan so that they would have sufficient funds to close on the purchase of the condominium. Becker, having the financial wherewithal, agreed to provide the Richards with the requested mortgage. In addition, Mrs Richards testified that the Richards could have obtained a equity line of credit on other property they owned which to use for closing. The Richards' concerns about their financing was confirmed when on October 20, 2004, Bank of America issued a letter stating that it would not go forward with the loan because the hurricane damage to the condominium had not been repaired. On October 22, 2004, the Taylors unilaterally cancelled the purchase agreement and directed the escrow agent to return all of the Richards' deposits. The Richards filed a complaint against the Taylors seeking specific performance of 2

6 the purchase agreement and damages. After a non jury trial, the trial court found the Richards ready, willing and able to purchase the condominium, and determined that the Taylors failed to comply with the contract awarded Richards a judgment for specific performance. The Taylors appealed this decision to the Fourth District Court of Appeal. The Lower Court originally rendered its opinion reversing Trial Court on February 28, After a timely motion for rehearing, the Lower Court withdrew its original opinion and rendered a new opinion on June 20, The revised opinion again reversed the Trial Court. A conformed copy of the Lower Court s opinion is attached to this brief as an appendix in accordance with Fla. R. App. P (D). A Notice to invoke the Discretionary Jurisdiction of this Court under Fla. R. App. P (a)(2)(A)(iv) was timely filed on July 19, SUMMARY OF THE ARGUMENTS This Court should exercise its discretion power to grant review of this case pursuant to Fla. R. App. P (a)(2)(A)(iv) because it expressly and directly conflicts with decisions of other District Courts of Appeal and this Court. Specifically, the holding below in this case that the only way a purchaser of real estate who requires a loan to obtain the funds to close can prove that he is able to close and thus be entitled to specific performance is by having a binding loan 3

7 commitment conflicts with (1) Edelstein v. Wilder, 198 So. 2d 665 (Fla. 3 rd DCA 1966) holding that all a buyer has to prove to show he is able to close is that he could have obtained a mortgage loan; (2) Perper v. Edell, 160 Fla. 477, 35 So.2d 387 (Fla. 1948) holding that a financially able purchaser is only required to show that he is able to command the necessary money on reasonable notice or within the time stipulated by the parties; (3) Sisco v. Rotenberg, 104 so 2d. 365, 375 (Fla. 1958) holding that where the seller indicates before closing that it intents not to close, all that is required on the part of the buyer is to notify the seller that the buyer is ready, willing and able to close; and (4) Wilson v. Odom, 215 So.2d 37 (Fla. 1 st DCA 1968) holding that when a seller refuses to close on the agreed closing date, he was prevented from raising as a defense the inability of the buyer to pay the purchase price. In holding that it could reevaluate the substantial evidence before the Trial Court in the form of the testimony of Donna Richards that the Richards could have obtained the funds to close by as to the existence of a equity line of credit that could have been accessed in order to close, the Lower Court substitute its own judgment for that of the trial court as to the weight of the evidence which directly and expressly conflicts with F.R. v. Children and Family Services, 763 So. 2d 478 (Fla. 5 th DCA 2000); Brand v. Florida Ppower Corp., 633 So.2d 594 (Fla 1 st DCA 1 The Richards also move for a rehearing En Banc which was denied. 4

8 1994); Stevens v. Cricket Club Condominiium, Inc., 784 So.2d 517, (Fla 3 rd DCA 2001); Manufacturers Nat. Bank of Hialeah v. Canmont Intern., Inc., 322 So. 2d 565,(Fla. 3 rd DCA 1965). ARGUMENT I - THE LOWER COURT S HOLDING THAT THE RICHARDS MUST HAVE A BINDING LOAN COMMITMENT IN ORDER TO PROVE THEY WERE ABLE TO CLOSE EXPRESSLY AND DIRECTLY CONFLICTS WITH SEVERAL CASES FROM OTHER DISTRICTS AND THIS COURT In reversing the trial court, the Lower Court held that the Richards failed to proof that they were ready willing and able to close because they failed to satisfy the tests set forth in Hollywood Mall, Inc. v. Capozzi, 545 So.2d 918 (Fla. 4th DCA 1989) In Capozzi, the court set forth three tests to determine if a purchaser is ready, willing and able to purchase: (1) If he has the needed cash in hand; or (2) if he is personally possessed of assets and a credit rating which enable him with reasonable certainty to command the requisite funds at the required time; or (3) if he has definitely arranged to raise the necessary money that he is unable to supply by obtaining a binding commitment for a loan for that purpose from a financially able third party. The court further explained in Capozzi that Although no precise line of demarcation between the application of the second and third divisions of the above rule can be laid down for all cases, it is clear-in the light of the purpose of the rule-that where the purchaser relies primarily, not upon his own personal 5

9 assets, but upon the proceeds of a contemplated loan or loans to be made to him by a third party, he is financially able to buy only if he has a definite and binding commitment from such third-party loaner. Capozzi at Thus under Copozzi, if a party seeking specific performance of a real estate contract intends to rely on a loan complete the purchase of the property, the loan commitment must be binding, otherwise he is not deemed to be ready willing and able to close, Since the loan commitment from Mr. Becker was not a binding commitment, the Lower Court found that the Richards were not ready willing and able to close and thus were not entitled to specific performance. The Richards respectfully submit that this holding expressly and directly conflicts with the decisions of other District Courts of Appeal and this Court on this same question of law so as to give this Court jurisdiction under Fla. R. App. P (a)(2)(A)(iv). In Edelstein v. Wilder, 198 So. 2d 665 (Fla. 3 rd DCA 1966) the Court found that a mortgage broker s letter that his company was willing to accept a loan application from the buyer was sufficient to prove that the buyer was financially able to close. In contrast, the Lower Court in this case required the Richards to prove that they have a binding loan commitment in order to demonstrate their financial ability to close. Thus this Case expressly and directly conflicts with the holding in Edelstein. In Perper v. Edell, 160 Fla. 477, 35 So.2d 387 (Fla. 1948), this Court held that A broker producing a purchaser financially able is not required to show that the purchaser is 6

10 then standing outside of the office door with all the cash in hand required to pay for the property. If the purchaser is financially able to pay for the property within the time stipulated it is sufficient. (Financially) able means that the proposed purchaser is able to command the necessary money to close the deal on reasonable notice or within the time stipulated by the parties. Perper at 391. Perper does not require a purchaser such as the Richards to prove that they have a binding loan commitment; it only requires them to prove that they are able to command the necessary money to close the deal on reasonable notice or within the time stipulated by the parties. Perper at 391. The Richards concede that the existence of a binding loan commitment is one way of demonstrating the command of funds necessary to close. However if the trial court believed, as it did in this in this case, that the lender would have funded even without a binding loan commitment, the requirement under Perper of being able to demonstrate the command of the necessary funds to close is satisfied. Because Perper does not require the existence of a binding loan commitment to prove that a purchase is able to close, Perper expressly and directly conflicts with the holding in Richards and Capozzi. Sisco v. Rotenberg, 104 so 2d. 365, 375 (Fla. 1958) involved an action for specific performance of an option to purchase contained in a lease. This Court held that where the seller indicates prior to closing that the seller does not intent to close, all that is required on the part of the buyer is to notify the seller that the buyer is 7

11 ready, willing and able to close. Sisco at 375. Under Sisco, becuse the Taylors unilaterally cancelled the scheduled closing, the Richards were not required to proof that they had a binding loan commitment, instead all they had to prove was that they had notified the Taylors that they intended to close on the property. Thus Sisco expressly and directly conflicts with the holding in Richards and Capozzi. In Wilson v. Odom, 215 So.2d 37 (Fla. 1 st DCA 1968) The First District Court of Appeal held that a buyer was entitled to specific performance, notwithstanding his failure to prove his ability to close, where the seller refused to close on the original terms of the contract. If a seller refuses to close on the terms of a contract, he is unable to raise the defense of the buyers inability to close. Wilson at In the instant case, the Taylors refused to close under the terms of the original contract; nevertheless the Lower Court held they could raise the defense of the Richards alleged inability to close. Thus Wilson expressly and directly conflicts with the holding in Richards and Capozzi. The Richards submit that this issue is of great importance to the real estate community, because if the Lower Court s holding is allowed to stand, prospective purchasers of real estate in Florida who intent to rely on a loan to finance their purchase will be forced to pay a commitment fee in order to have a binding loan commitment in order to protect their right to specific performance. Such is not the case in a many residential real estate transactions today. 8

12 ARGUMENT II - BY RE-EVALUATING THE EVIDENCE AND SUBSTI- TUTING ITS JUDGEMENT FOR THE TRIAL COURT S JUDGMENT, THE LOWER COURT S DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH SEVERAL CASES FROM OTHER DISTRICTS. The Lower Court held that there was insufficient evidence to satisfy the second prong of the test in Capozzi despite Donna Richards testimony that the Richards could have obtained the funds by taking out a line of credit on other property they owned and that the Richards had the financial ability to obtain a loan from Bank of America. In holding that it could re-evaluate the substantial evidence before the Trial Court as to the Richards financial condition and substitute its own judgment for that of the trial court as to such evidence, the Lower Court s decision directly and expressly conflicts with F.R. v. Children and Family Services, 763 So. 2d 478 ( Fla. 5 th DCA 2000); Brand v. Florida Ppower Corp., 633 So.2d 594 (Fla 1 st DCA 1994); Stevens v. Cricket Club Condominiium, Inc., 784 So.2d 517, (Fla 3 rd DCA 2001); Manufacturers Nat. Bank of Hialeah v. Canmont Intern., Inc., 322 So. 2d 565,(Fla. 3 rd DCA 1965). All of these cases hold that it is improper for the appellate court to re-evaluate the evidence and to substitute its own judgment for that of the trial court where there is substantial competent evidence in the record to support the trial court s findings of fact. 9

13 CONCLUSION For the reasons set forth above, this Court has jurisdiction of this matter under Fla. R. App. P (a)(2)(A)(iv). Certificate of Service I CERTIFY that a true and correct copy of the foregoing has been furnished by U. S. Mail to Michael T. Calvit, Esq., 650 Azalea Lane, Suite B, Vero Beach, Florida 32963, on this 30 th day of July, By Florida Bar No CERTIFICATE OF COMPLIANCE WITH FONT REQUIREMENTS I CERTIFY that I have complied with the font requirements per the Florida Rules of Appellate Procedure. This Brief was prepared in Times New Roman font, 14 point. By Ira C. Hatch, Jr. Florida Bar No