IN THE SUPREME COURT OF FLORIDA CASE NO.: SC Lower Tribunal Case No.: 3D SPENCER MCGUINNESS, Petitioner, PROSPECT ARAGON, LLC,

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1 IN THE SUPREME COURT OF FLORIDA CASE NO.: SC Lower Tribunal Case No.: 3D SPENCER MCGUINNESS, Petitioner, v. PROSPECT ARAGON, LLC, Respondent. PETITIONER S AMENDED BRIEF ON JURISDICTION (with Incorporated Appendix) By: Geoffrey B. Marks 100 Almeria Avenue, Suite 320 Coral Gables, Fl gmarks@attyfla.com Telephone: (305) Facsimile (305)

2 TABLE OF CONTENTS Page TABLE OF CONTENTS... ii TABLE OF AUTHORITIES... iii STATEMENT OF THE CASE AND THE FACTS... 1 SUMMARY OF THE ARGUMENT... 3 ARGUMENT... 4 THE THIRD DISTRICT S DECISION CONFLICTS WITH CLONE, INC. v. ORR, 476 So.2d 1300 (Fla. 5 th DCA 1985) CONCLUSION... 8 CERTIFICATE OF SERVICE... 9 CERTIFICATE OF COMPLIANCE TABLE OF AUTHORITIES

3 Cases Page Astbury Arms Develop. Corp. v. Florida Dep t of Business and Prof. Reg., Div. Of Fla. Land Sales and Condos, 456 So.2d 1291 (Fla. 2d DCA 1984)... 3 Clone, Inc. v. Orr, 476 So.2d 1300 (Fla. 5 th DCA 1985)... 3, 5, 6 McGuinness v. Prospect Aragon, LLC, 981 So.2d 496 (Fla. 3d DCA 2008) Ocean Dunes of Hutchinson Island Develop. Corp. v. Colangelo, 463 So.2d 437 (Fla. 4 th DCA 1985)... 7 Statutes , Fla. Stat.... 3, (1)(a)(1), Fla. Stat (1)(b), Fla. Stat.... 4, 5 STATEMENT OF THE CASE AND FACTS

4 The case and facts are fairly stated in the Third District s opinion and are restated here. On February 7, 2006, [Spencer] McGuinness executed a contract to purchase several condominium units from Prospect [Aragon, LLC]. McGuinness received all of the required condominium documents on February 9, Prospect executed the contract on February 15, The contract required McGuinness to pay a $1 million deposit upon execution of the agreement. On March 1, 2006, McGuinness attempted to rescind the contract. As of that date, the deposit had not been paid. On March 7, Prospect filed suit against McGuinness claiming breach of contract based upon McGuinness's failure to pay the deposit. McGuinness v. Prospect Aragon, LLC, 981 So.2d 496, 498 (Fla. 3d DCA 2008). 1 Both parties moved for summary judgment. After conducting a hearing, the trial court ruled that McGuinness had not timely rescinded the contract and had breached the contract 1 A Copy of the Third District s Aragon decision is attached

5 by not timely paying the deposit. The trial court entered judgment in favor of Prospect in the amount of $1 million pursuant to the liquidated damage provision contained in the parties' contract. Id. McGuinness sought review in the Third District Court of Appeal of the adverse summary judgment. McGuinness challenged the trial court s interpretation of the statutory non waivable right to rescind a condominium contract and the liquidated damage determination. The Third District affirmed the trial court holding that the language of section was unambiguous in setting forth the time of when the non waivable recision period began and ended. Id. hereto at Tab 1.

6 SUMMARY OF THE ARGUMENT Chapter 718, the Florida Condominium Act, creates rights and obligations as between purchasers and developers of condominiums, Astbury Arms Develop. Corp. v. Florida Dep t of Business and Prof. Reg., Div. of Fla. Land Sales and Condos., 456 So.2d 1291, 1293 (Fla. 2d DCA 1984), that are unique and distinct from other types of real estate purchases. One of those unique rights is a fifteen-day right to void a real estate contract , Fla. Stat. The decision of the Third District, however, holds that the statutory right, which is in the nature of a limitation on liability, is not dependent on the existence of a contract between the parties. The decision of the Third District holds that the right to void the contract can expire even before the parties have a contract. The decision of the Third District is in express and direct conflict with the point of law established in Clone, Inc. v. Orr, 476 So.2d 1300 (Fla. 5 th DCA 1985), that contractual rights under the Condominium Act must be real and not illusory. The decision of the Third District makes the non waivable right to void a purchase and sale agreement an illusion if the parties are

7 not required first to have a contract. ARGUMENT THE THIRD DISTRICT S DECISION CONFLICTS WITH CLONE, INC. v. ORR, 476 So.2d 1300 (Fla. 5 th DCA 1985). All condominium contracts are required to contain the following language: THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER, AND RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED TO HIM OR HER BY THE DEVELOPER UNDER SECTION , FLORIDA STATUTES. THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO THE BUYER. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT (1)(a)(1), Fla. Stat. Section (1)(b), Florida Statutes, identifies the documents a condominium developer/seller must provide the buyer and states:

8 Until such time as the developer has furnished the documents listed below to a person who has entered into a contract to purchase a residential unit..., the contract may be voided by that person.... The contract may be terminated by written notice from the proposed buyer... delivered to the developer within 15 days after the buyer receives... all the documents required by this section (1)(b), Fla. Stat. (emphasis supplied). The decision of the Third District states [t]he unambiguous language of the statute clearly ties the time for rescission to the later of the time that the buyer executes the agreement or receives the required condominium documents. Aragon, 981 So.2d at 498. The opinion holds that: The statute provides specified rights to the buyer of a condominium under specified circumstances. In all cases, it gives the buyer a 15-day cooling off period to consider whether to go forward with the sale. If the seller signs the contract anytime during that 15-day period, then the statute provides substantive rights to the buyer, since the buyer can rescind the contract even after it has been signed by the seller. In those circumstances in which the seller does not sign the contract within 15 days, the buyer receives no substantive rights, since it could exercise its common law right to withdraw its offer any time during that 15-day period. However, simply because a statute does not provide substantive rights in all factual situations does not mean the statute is unenforceable according to its terms. Id. at

9 The decision of the Third District expressly and directly conflicts with the Fifth District Court of Appeal s decision in Clone, Inc. v. Orr, 476 So.2d 1300 (Fla. 5 th DCA 1985). In Clone, the court held that a real estate contract s limitation on liability provision must be unequivocal, mutual, and reasonable to be enforceable. This directly and expressly conflicts with the holding of the Third District because the statutory right of recision of section is in the nature of a limitation on liability, yet the Third District eliminates the mutual obligation for the parties to have a contract before making the recision period enforceable and operable. In Clone, the parties condominium purchase agreement had a default provision that allowed the developer to refuse to sell for any or no reason without liability for such refusal other than to return the purchaser's deposits. The court held that but for the reference in the default provision to Chapter 718 of the Florida Statutes, the agreement would not be a binding contract because it would obligate the developer to nothing and allow it to refuse to sell for any or no reason without liability for such refusal other than to return to the purchaser that which

10 is rightfully his. Clone, 476 So.2d at The Clone court cited and reviewed the numerous instances and references in Chapter 718 to a condominium contract. As stated by the Clone court: Clearly then, the statute requires a contract between the developer and a purchaser. The concept of a contract is well recognized in the law. It is a legal relationship which contemplates an agreement enforceable at law between two or more parties for the doing or not doing of a specific act. A contract must create legal obligations. Kislak v. Kreedian, 95 So.2d 510 (Fla.1957). Because the default provision incorporates the terms of Chapter 718, the agreement cannot be construed as an option, but must be construed as a contract, as required by the statute. Id. at The default provisions, according to the Clone court, were unreasonable as the seller s obligations were wholly illusory while the buyer s were quite real. Id. The Clone court concluded that to enforce the default provision would be unconscionable and unfair. Certainly it would not provide the protection to a condominium purchaser to which the statute clearly entitles him and which he has a right to expect. Id. (emphasis supplied); see also Ocean Dunes of Hutchinson Island Develop. Corp. v. Colangelo, 463 So.2d 437 (Fla. 4 th DCA 1985) (Parties to contract can stipulate to

11 different kinds of remedies for breach by each, but both parties must have genuine, not illusory obligations.). The decision of the Third District reaches the exact opposite result and eliminates the protection given a condominium purchaser by the statute. It seems nonsensical to conclude that the unilateral right of recision can expire before the parties have an enforceable contract. Yet that is exactly what the Third District decision holds. Where one court holds a contract is created and necessary to enforce statutory rights, Clone, the other, Aragon, holds those statutory rights do not exist because a contract, although mandated by statute, is meaningless.

12 CONCLUSION The Third District s decision eliminates a non waivable statutory right by ignoring the requirement that the parties have a contract, which section 718 clearly contemplates must exist between a buyer and seller. The Third District decision expressly and directly conflicts with a decision from the Fifth District Court of Appeal holding that section 718 mandates the existence of a contract with real, not illusory, rights flowing therefrom in condominium purchases. This Court should exercise its discretionary jurisdiction to clarify and unify the law and reinstate the condominium purchaser s right to rescind a contract, not merely an offer. Attorneys for Petitioner 100 Almeria Avenue, Suite 320 Coral Gables, Fl Tel: (305) Fax: (305) By: Geoffrey B. Marks Fla. Bar No.: CERTIFICATE OF SERVICE

13 I CERTIFY that a copy hereof has been served on this 23 rd day of July, 2008 by U.S. Mail to: Michael J. Schlesinger, Esq., 799 Brickell Plaza, Suite 700, Miami, FL 33131, Gonzalo R. Dorta, Esq., 334 Minorca Avenue, Coral Gables, FL 33134, Christopher Bopst, Esq., 2525 Ponce de Leon Boulevard, Suite 400, Coral Gables, FL 33134, and Brian Goodkind, Esq., 4121 La Playa Blvd., Coconut Grove, FL By: Geoffrey B. Marks CERTIFICATE OF COMPLIANCE I hereby certify that the foregoing initial brief was typed

14 in Times New Roman 14pt. By: Geoffrey B. Marks L:\ \B\Jurisdictional Brief wpd