Third District Court of Appeal
State of Florida
Opinion filed September 20, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D15-1136
Lower Tribunal No. 11-39836
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Penny’s Investment Corp.,
Appellant,
vs.
Alexander Gasamanes and Yeremy Hernandez Prieto,
Appellees.
An appeal from the Circuit Court for Miami-Dade County, Antonio Marin,
Judge.
Benitez & Associates and Leo Benitez and Lizette Benitez, for appellant.
Silver & Silver and Ira S. Silver, for appellees.
Before ROTHENBERG, C.J., and SUAREZ and FERNANDEZ, JJ.
SUAREZ, J.
Penny’s Investment Corp. (Penny’s) appeals a final judgment granting
Appellees Alexander Gasamanes (“Gasamanes”) and Yeremy Hernandez Prieto
(“Prieto”) a refund of their home construction deposits. We affirm.
On March 20, 2011, Appellees executed a Sales Agreement (“Agreement”)
to purchase a home which was to be constructed by Penny’s. Penny’s actually
executed the Agreement on March 23, 2011 because the person with whom
Appellees interacted on March 20th was merely a sales agent for a different entity
and was not authorized to execute the Agreement on Penny’s behalf. The Purchase
price of the home was $239,900.00, and nothing in the Agreement indicated that
the price of the home included any additional cost resulting from the location of
the lot on which the home was to be built.1
It is undisputed that on March 20, 2011 Appellees provided the sales agent
with a check in the amount of $5,000.00. It is also undisputed that on March 23,
1 In their Answer Brief Appellees argued that they were not provided a full copy of
the Agreement at the time of execution. Appellees’ trial testimony on this issue is
unclear but can be read as admitting that, in fact, they did have a complete copy of
the Agreement. However, that reading of the testimony is undermined by the fact
that Appellees’ counsel made repeated requests for a complete copy of the
Agreement in September and November 2011 and neither Penny’s nor its counsel
responded to those requests. The question of whether Appellees had a full copy of
the Agreement appears to be an issue of fact which the trial court implicitly
resolved in favor of Appellees in the Final Judgment. It is not the function of this
Court to make its own factual findings and we therefore review this appeal
presuming that Appellees did not have a full copy of the Agreement prior to its
production by Penny’s in this litigation. Underwater Eng'g Servs., Inc. v. Util. Bd.
of City of Key W., 194 So. 3d 437, 444 (Fla. 3d DCA 2016), reh'g denied (July 6,
2016) (“In reviewing a judgment rendered after a bench trial, ‘the trial court's
findings of fact come to the appellate court with a presumption of correctness and
will not be disturbed unless they are clearly erroneous.’” (quoting Emaminejad v.
Ocwen Loan Servicing, LLC, 156 So. 3d 534, 535 (Fla. 3d DCA 2015))); Farneth
v. State, 945 So. 2d 614, 617 (Fla. 2d DCA 2006) (“A fundamental principle of
appellate procedure is that an appellate court is not empowered to make findings of
fact.”).
2
2011 Appellee Gasamanes went to the offices of the sales agent and delivered two
additional checks, one in the amount of $18,990.00 and another for $15,000.00.
The Agreement acknowledges receipt of the original $5,000.00 and sets forth a
requirement that an “Additional 5% deposit” in the amount of $18,990.00 is due
within 30 days after acceptance of the contract by seller. However, the Agreement
makes no provision for the $15,000.00 payment. The initial check and the
$18,990.00 check total $23,990.00, exactly 10% of the purchase price of the home,
and the Agreement indicates that the balance due for the home after the deposits is
$215,910.00.
The parties disagree about the purpose of the additional check. Penny’s
claims it is an additional deposit required for a premium lot and a notation to that
effect is written on the memo portion of the check. Appellees testified that they
were never advised of any premium price for the location of the home they
selected and deny any knowledge of any such additional deposit requirement. It is
undisputed that the notation on the check was written in by the sales agent who
received the check and not by either Appellee. It is also undisputed that the
Agreement does not contain any provision or additional language indicating that
the lot selected by Appellees was a “premium lot” or that there was any additional
cost associated with the lot.2
2 At some points Penny’s has also argued that the $15,000.00 was simply an
additional deposit amount. That argument is inconsistent with the Agreement’s
requirement that Appellees pay 20% of the purchase price and obtain financing for
3
The Agreement contains a Mortgage Rider which states, in pertinent part:
THE PURCHASER’S obligation to close the above
referenced Contract is subject to the PURCHASER
obtaining a Mortgage Commitment in the amount of
$191,920.
(A) The PURCHASER agrees to make application with
FLORIDA MORTGAGE UNDERWRITERS, INC. the
Lender selected by the SELLER and to execute all
necessary papers for a Conventional Mortgage Loan
(prevailing rates and terms) in the amount set forth above
within five (5) working days of date.
....
(C) PURCHASER shall notify SELLER in writing
within forty-five (45) days of date hereof if he has or has
not qualified for said financing. In the event
PURCHASER fails to notify the SELLER in writing
within said 45 days period, it shall be conclusively
presumed that PURCHASER has obtained a Mortgage
Commitment in accordance with the terms of this Rider
and this sale will proceed as an all cash transaction.
(e.s.)
(D) If the PURCHASER fails to obtain said Mortgage
Commitment and has notified SELLER in writing within
the time specified in Paragraph C of this Mortgage Rider,
then all deposits made hereunder, will be returned to
PURCHASER and this Contract will be null and void
and all parties will be relieved of all liability hereunder.
....
(F) IN THE EVENT PURCHASER APPLIES WITH A
LENDER OTHER THAN THE ONE SELECTED BY
SELLER, THIS CONTRACT SHALL BE
the remaining 80% and is also inconsistent with the merger clause in the
Agreement. We therefore reject that claim.
4
CONSIDERED AN “ALL CASH SALE” (e.s.)
PURCHASER SHALL IMMEDIATELY MAKE AN
ADDITIONAL NON-REFUNDABLE DEPOSIT OF
10% OF THE PURCHASE PRICE. THIS MORTGAGE
RIDER AND THE FINANCING CONTINGENCY
SHALL NOT APPLY. FAILURE TO MAKE THE
ADDITIONAL DEPOSIT ON TIME SHALL
CONSTITUTE A DEFAULT UNDER THE
CONTRACT, RECEIPT BY SELLER OF A
QUALIFICATION OR PREQUALIFICATION
LETTER FROM ANOTHER LENDER SHALL NOT
REPRESENT A WAIVER OF THE CONDITIONS SET
FORTH IN THIS PARAGRAPH.
In other words, the Mortgage Rider indicates that the sale will be “all cash” under
two circumstances: (i) under the “conclusive presumption” which arises if the
purchaser fails to notify the seller of a Mortgage Commitment from the seller’s
chosen mortgage lender within 45 days of the contract date; or (ii) if the purchaser
elects to obtain financing from a different lender.
The Mortgage Rider additionally contained a hand-written provision, crafted
by the sales agent but initialed by Penny’s, which states:
Seller financing in the amount of $191,900 for a term of
30 years fixed at a rate of 6% with 1% discount pt. no
prepayment penalty. Total monthly payment will include
principal [sic], interest and escrow payments.
Nothing in that provision indicates that such financing will be considered “all
cash”
In September 2011 counsel for Appellees wrote to Penny’s and stated that
Appellees were required to wait for commencement of construction to apply for a
5
loan commitment and that as a result of delays by Penny’s, Appellees were unable
to obtain a loan commitment. Counsel also demanded return of the deposits. In
response, on September 21, 2011 counsel for Penny’s advised that pursuant to the
above-quoted printed provisions of the Agreement, Appellees were obligated to
apply for financing within five days of the Agreement and/or to notify Penny’s
within 45 days if they had not qualified for financing. Counsel further stated: “At
this point, your client’s Sales Agreement is an ‘all cash transaction.’”
Inconsistently and confusingly counsel then quoted the hand-written
provision for Seller financing and stated: “Your clients have financing available to
close the purchase transaction of the Property.” This paragraph was Penny’s sole
reference to an agreement to provide financing in its dealings with Appellee.
Appellees’ counsel responded to that letter by requesting a complete copy of
all documents signed by Appellees on five occasions between September and
November 2011. Neither Penny’s nor its counsel responded to those requests. On
November 29, 2011 Appellees filed suit demanding return of their deposits. In the
Complaint Appellees again alleged that they did not have copies of the documents.
Simultaneously, Appellees filed a Request for Production asking for copies of all
documents. According to the record, Penny’s was served with the Complaint in
December 2011, but failed to file an Answer. The record reflects that a default was
entered against Penny’s.
6
Despite the pendency of the action, and despite Appellees’ counsel’s
repeated requests for copies of the documents, on February 21, 2012 Penny’s
counsel sent a letter to Appellees’ counsel reiterating the printed terms of the
Mortgage Rider and again stating that “At this point, your client’s purchase of the
Property under the Sales Agreement is an ‘all cash transaction.’” Notably, no
mention was made of Seller financing, much less the means by which Appellees
could avail themselves of such financing. The letter also advised that the
Certificate of Occupancy for the Property had been obtained on February 17 and
that Penny’s expected to close the sales transaction on February 27, 2012.
Appellees did not attend a closing on the home on February 27, 2012 and did not
otherwise respond to the letter.
As a result of Appellees’ failure to appear at the closing, on February 28
Penny’s counsel sent another letter to Appellees’ counsel again quoting the printed
Mortgage Rider provisions, again making no mention of Seller financing and again
stating that the purchase was an “all cash transaction” at that point. The letter
declared Appellees in default for failing to appear at the February 27, 2012 closing,
but also provided Appellees with the opportunity to close on the home on February
29, 2012. The letter warned that if Appellees failed to appear Penny’s would
terminate the Agreement. Appellees again did not appear for a closing on the
home or otherwise respond to the letter. On March 1, 2012 Penny’s counsel
terminated the Agreement in writing.
7
Subsequently, Penny’s filed an Answer3 in the pending litigation in which it
alleged only that Appellees failed to timely notify it of their inability to obtain a
Mortgage Commitment and that Penny’s performance under the Agreement was
therefore excused. The Answer made no mention of Seller financing. In October
2012 Penny’s amended its Answer to include a Counterclaim, but again failed to
make any mention of Seller Financing or Appellees’ entitlement thereto.
Additionally, in March 2013 Penny’s moved for sanctions against Gasamanes
claiming that he was not entitled to return of any deposits because Prieto had
actually written the deposit checks. Again Penny’s made no mention of any Seller
financing.
In December 2013 Appellees filed a Second Amended Complaint in which
they alleged for the first time that Penny’s had breached the Agreement by failing
to provide the Seller financing evidenced by the hand-written provision of the
Mortgage Rider. This appears to be the first pleading or other document in this
litigation in which either party made mention of the existence of the agreement to
provide Seller financing. Nevertheless, in October 2014 Penny’s moved for
summary judgment and again failed to argue or otherwise make mention of the
agreement for it to provide financing. Instead Penny’s relied solely on Appellees’
3The record is unclear as to setting aside of the prior default, but we presume that
such was properly done.
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alleged failure to timely advise it that they had failed to obtain a Mortgage
Commitment.
In opposition to that motion Appellees argued that Penny’s had breached the
Agreement by failing to provide the Seller financing as agreed in the hand-written
provision of the Mortgage Rider. Appellees filed their own Motion for Summary
Judgment on that same basis in December 2014. Neither motion for summary
judgment was granted and the matter proceeded to a bench trial.
Penny’s Memorandum of Law filed prior to the non-jury trial in this matter
is the first mention it made in any pleading regarding the agreement for Seller
financing. In that Memorandum Penny’s argued that the filing of the initial
Complaint constituted a repudiation of the Agreement citing Mori v. Matsushita
Electric Corp. of America, 380 So. 2d 461 (Fla. 3d DCA 1980).4 However,
Penny’s also acknowledged that it disregarded any such alleged repudiation by
proceeding with construction of the home and demanding closing. Acosta v. Dist.
Bd. of Trustees of Miami-Dade Cmty. Coll., 905 So. 2d 226, 229 (Fla. 3d DCA
2005) (“Where a party fails to declare a breach of contract, and continues to
perform under the contract after learning of the breach, it may be deemed to have
4 In response Appellees argued that Penny’s failure to provide them copies of the
Agreement prior to filing suit constituted a breach of the implied duty to cooperate.
PL Lake Worth Corp. v. 99Cent Stuff-Palm Springs, LLC, 949 So. 2d 1199 (Fla.
4th DCA 2007). Appellees argued that in the absence of a complete copy of the
Agreement they had no option but to file suit and that under the circumstances that
filing could not be considered a repudiation.
9
acquiesced in an alteration of the terms of the contract, thereby barring its
enforcement.”).
After a non-jury trial the trial court entered Final Judgment in favor of
Appellees and ordered that they be refunded the $38,990.00 paid, plus interest.
The trial court found that Penny’s was obligated to provide financing to Appellees
and that demanding an “all cash transaction” was contrary to the terms of the
Agreement – in essence finding that Penny’s had breached the Agreement by
demanding such a closing in its February 2012 correspondence. The trial court
further found that the Agreement had no provision requiring payment of the
$15,000 additional deposit which Penny’s characterized as being for a premium
lot. Penny’s has appealed that ruling.
Initially we note that it appears that this litigation could have been avoided
had the parties engaged in both more and better communication. For example,
when responding to Appellees’ first demand for refund Penny’s confusingly
demanded an “all cash” closing and stated that it would provide financing.
Penny’s made no effort to explain how or when or through what mechanism such
financing could be secured. In addition, Penny’s failed to respond to five requests
for copies of the Agreement made by counsel over the course of three months.
Under those circumstances Appellees cannot be faulted for concluding that
Penny’s would not fulfill its commitment to provide financing.
10
However, even if they did not have a complete copy of the Agreement,
Appellees are equally at fault for failing to follow up on the portion of Penny’s
counsel’s September 21, 2011 letter which stated that owner financing would be
provided. It appears that much confusion and litigation could have been forestalled
if either party had initiated discussions regarding the promised Seller financing and
how it could be implemented.
On the merits, it is clear from the record that Penny’s waived any breach
which might be said to have occurred by Appellees’ failure to advise it that they
had obtained financing from another lender and/or any breach which could be said
to have occurred by Appellees’ failure to provide the additional 10% deposit called
for in the Mortgage Rider if financing is obtained other than through Penny’s
preferred financing company. It is also clear that Penny’s waived any potential
initial breach by Appellees in filing the underlying action. We therefore affirm the
trial court’s conclusion that Penny’s breached the Agreement by demanding an “all
cash” closing (as that term is used in the Mortgage Rider).5 In its own
Memorandum of Law Penny’s acknowledged its disregard of the potential initial
breach by Appellees and binding case law supports that having waived that breach,
5 Penny’s has argued that the “all cash” term used in its letters did not mean what it
said and instead referred to a term of art in which a purchaser appears at a closing
with sufficient commitment to pay the seller, regardless of the source of that
commitment – i.e. actual cash or promissory note from a different lender or
something else. Because the term “all cash” is used in a specific way in the
Mortgage Rider, we do not apply the “term of art” as described by Penny’s under
these circumstances.
11
Penny’s may not now rely upon it as a reason for reversal of the trial court’s ruling.
Thus, the trial court correctly ruled that Appellees were not liable for any
initial breach of the contract. Acosta, 905 So. 2d at 229 (Fla. 3d DCA 2005).
In addition, the trial court resolved any question of fact as to the reasons for
the additional $15,000 deposit in favor of Appellees. Where Penny’s did not
provide any written evidence to support its claim that it was a “premium” for an
upgraded lot and where Appellees denied any knowledge of any such premium
cost, the trial court acted properly in resolving the factual dispute.
Affirmed.
12