LUZ MERY CANON v. FERRIS ZIADIE ( 2021 )


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  •        DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
    FOURTH DISTRICT
    LUZ MERY CANON,
    Appellant,
    v.
    FERRIS ZIADIE,
    Appellee.
    No. 4D21-356
    [September 15, 2021]
    Appeal from the County Court for the Seventeenth Judicial Circuit,
    Broward County, Mardi Levey Cohen, Judge; L.T. Case Nos. COCE19-8766
    and CACE20-9966.
    Samuel J. Gittle of EPGD Attorneys at Law, P.A., Miami, for appellant.
    Charmaine Powell of the Law Office of Charmaine C. Powell, Miami, and
    Charles H. Groves of the Law Offices of Charles H. Groves, North Miami,
    for appellee.
    FORST, J.
    Appellant Luz Mery Canon (“Buyer”) appeals the amended final
    judgment’s award of prevailing party attorney’s fees to Appellee Ferris
    Ziadie (“Seller”). We agree with Buyer’s contention that she, not Seller,
    prevailed on the underlying case’s most (if not only) significant issue.
    Accordingly, we reverse.
    Background
    Buyer entered into a contract with Seller for the sale of real property.
    Buyer placed $10,000 in escrow as a deposit. The contract included a
    liquidated damages clause stating that if Buyer failed to diligently pursue
    financing, Buyer would be in default and would forfeit the entire $10,000
    deposit to Seller.
    Buyer obtained preliminary approval for a loan application. However,
    six days before closing, Buyer voluntarily terminated her employment with
    1
    the United States Army. As a result, the lender was unable to verify
    Buyer’s income and rejected her loan application.
    Seller informed Buyer that as a sign of good faith, Seller would allow
    Buyer an opportunity to “regroup” with a lender to obtain financing.
    However, Seller stated that as a contingency, the property would be put
    back on the market, though Buyer’s contract would be given top priority.
    Approximately ten days later, Seller informed Buyer that he was
    canceling the contract based on her failure to obtain financing. Seller also
    stated that he was retaining the entire $10,000 deposit pursuant to the
    liquidated damages clause. Seller subsequently sold the property to a
    different buyer (at a higher sales price than Buyer’s offer).
    Buyer filed a claim against Seller alleging that Seller breached the
    contract by: (1) failing to provide notice that he was no longer interested
    in moving forward with the contract, and (2) selling the property to another
    buyer while simultaneously giving an extension to Buyer to obtain
    financing. Buyer’s complaint requested the deposit’s return, as well as
    “reliance damages for [two months of storage—about $1,600] and other
    fees [about $525] needlessly incurred.”
    In response, Seller raised a counterclaim, alleging that Buyer breached
    the contract by failing to diligently pursue financing, and further
    contending that he was entitled to retain the deposit pursuant to the
    liquidated damages clause. Buyer then raised an affirmative defense
    alleging that she was entitled to recover her deposit because the liquidated
    damages clause was unenforceable.
    Following the bench trial’s conclusion, the trial court issued a final
    judgment, finding that Buyer breached the contract because she did not
    diligently pursue financing. However, the court stated that “[n]either party
    presented evidence or even argued as to the damages,” thus the court
    awarded no damages to Seller. Additionally, the court found that the
    liquidated damages clause was not enforceable because it lacked
    mutuality of obligation and further stated that “[t]o award [Seller] the full
    deposit amount of $10,000 after the property was sold would amount to
    an unfair windfall for [Seller].” As a result, the court ordered Seller to
    return Buyer’s deposit. Lastly, the court found that Seller was the
    prevailing party and ordered Buyer to pay Seller’s reasonable attorney’s
    fees.
    Buyer moved for rehearing and to alter the final judgment, arguing that
    she was the prevailing party because she prevailed on her affirmative
    2
    defense which forced Seller to return the deposit. The trial court denied
    the motion, maintaining that Seller was the prevailing party, and issued
    an amended final judgment stating in pertinent part:
    The prevailing party in this case is [Seller] as he has prevailed
    on the breach of contract counter-claim against [Buyer].
    Pursuant to Moritz v. Hoyt Enterprises, Inc., 
    604 So. 2d 807
    (Fla. 1992), a purchaser who sued a vendor for breach of
    contract on the purchase of a new construction house and did
    not prevail and was found to have breached the contract while
    nonetheless being entitled to partial deposit returned, was not
    the prevailing party for purposes of awarding attorney fees
    pursuant to the contract terms. The vendor prevailed on his
    breach of contract counter-claim even though he had to
    return partial deposit. Accordingly, [Buyer] in the instant case
    has failed to prove her case and has been found to have
    breached the contract. [Seller] has prevailed on the counter-
    claim for breach of contract. [Seller] is the prevailing party
    even though he failed to prove damages and is ordered to
    return the deposit funds.
    The instant appeal followed.
    Analysis
    “The standard of review of a trial court’s ruling on the issue of
    entitlement to prevailing party attorney’s fees is abuse of discretion.”
    Skylink Jets, Inc. v. Klukan, 
    308 So. 3d 1048
    , 1051 (Fla. 4th DCA 2020).
    The determination of the prevailing party rests on whether the party
    “succeeded on any significant issue in litigation which achieves some of
    the benefit the parties sought in bringing suit.” Trytek v. Gale Indus., Inc.,
    
    3 So. 3d 1194
    , 1200 (Fla. 2009) (citation and alteration omitted).
    On appeal, Buyer argues that the trial court erred in determining that
    Seller was the prevailing party in the underlying action and its reliance on
    Moritz was misplaced. We agree.
    In Moritz, the parties entered into a contract for the construction of a
    home and the plaintiffs paid a total deposit of $57,877.45. 
    604 So. 2d at 808
    . The plaintiffs eventually complained about the quality of certain
    items and asserted that the quality was inconsistent with that of a
    luxurious custom home. 
    Id.
     The plaintiffs then purchased a different
    house. 
    Id.
     Following that transaction, the plaintiffs sent a letter to the
    defendant, repudiating the home construction contract on the grounds
    3
    that the house had not been built according to the plans and demanding
    the return of their deposit. 
    Id.
     The defendant later sold the home for
    $10,000 below the plaintiff’s original purchase price, not including “the
    extras.” 
    Id.
     The defendant “claimed it offered to return the [plaintiffs’]
    deposit, minus damages caused by their breach, but the [plaintiffs]
    refused.” 
    Id.
    Following these events, the plaintiffs sued, seeking the refund of their
    deposit, and alleging that the defendant breached the contract by failing
    to construct the house in accordance with their agreement. 
    Id.
     The
    defendant denied the allegations and brought a counterclaim for breach of
    contract, alleging that the plaintiff’s repudiation caused it damages
    exceeding $5,000. 
    Id. at 809
    .
    The trial court found that the defendant was not entitled to retain the
    deposit as liquidated damages and that “the measure of damages that
    could be sought was limited to [the defendant’s] general compensatory
    damages.” 
    Id.
     Based on these findings, the trial court directed the
    defendant to return the total deposit, plus interest, in the amount of
    $66.105.46. 
    Id.
     However, this was offset by the court ordering the
    plaintiffs to pay compensatory damages based on the difference between
    the home’s value at the time of the breach and the contract price, plus
    interest—$20,579.56. 
    Id.
     As a result, the plaintiffs achieved a net
    recovery of $45,525.90. 
    Id.
     Despite awarding the plaintiffs a net recovery,
    the trial court determined that the defendant was the prevailing party for
    purposes of awarding attorney’s fees. 
    Id.
     Ultimately, the Florida Supreme
    Court affirmed and explained that the prevailing party was the party that
    prevailed on “the significant issues in the litigation” and not necessarily
    the party that achieved a net recovery. 
    Id.
     at 809–10.
    The underlying case is distinguishable from Moritz. Here, both parties
    brought a breach of contract claim, but neither argued for, nor presented,
    any evidence of damages beyond the approximately $2,125 in “reliance
    damages” requested by Buyer. Nor did either party seek nonmonetary
    relief. Thus, the primary—if not only—“significant issue” in the underlying
    litigation was not the recovery of damages arising from an alleged breach,
    but rather, who was entitled to the deposit. In contrast, the primary issue
    in Moritz was whether the defendant was entitled to compensation for the
    damages that he incurred from the plaintiffs’ breach—specifically, because
    the defendant was forced to sell the property at a lower amount than was
    agreed to between the parties. 
    Id. at 808
    . Thus, the defendant in Moritz
    had raised and prevailed on an issue that was separate from the retention
    of the deposit.
    4
    Moreover, in the instant case, Seller was seeking a specific kind of
    relief—retention of the deposit—whereas Buyer’s principal objective was
    recovering her deposit. The trial court ruled in favor of Buyer’s affirmative
    defense, and in doing so, found that the liquidated damages clause was
    unenforceable and ordered Seller to return the deposit. Under these
    circumstances, it was unreasonable for the trial court to find Seller was
    nevertheless the prevailing party because this finding was based on a
    ruling that did not provide Seller with his sought-after relief (the retention
    of the deposit). 1 Therefore, we find that the trial court erred in awarding
    Seller prevailing party attorney’s fees.
    Conclusion
    The determinative and sole “significant” issue in this case was the
    liquidated damages clause’s enforceability. Following the trial court’s
    ruling that the clause was not enforceable, the breach of contract issue
    became mostly irrelevant, and Seller never obtained his sought-after relief
    (retention of the deposit). Accordingly, we reverse the trial court’s
    determination that Seller was the prevailing party and remand with
    instructions to award Buyer reasonable attorney’s fees as the prevailing
    party.
    Reversed and remanded.
    KLINGENSMITH and ARTAU, JJ., concur.
    *          *          *
    Not final until disposition of timely filed motion for rehearing.
    1 In his counterclaim, Seller does not allege any facts showing that he suffered
    damages. The counterclaim simply states that “[d]ue to [Buyer’s] Breach of
    Contract [Seller] has suffered damages.” This fails to allege any ultimate facts
    elucidating the damages allegedly sustained. See, e.g., Louie’s Oyster, Inc. v.
    Villaggio Di Las Olas, Inc., 
    915 So. 2d 220
    , 221–22 (Fla. 4th DCA 2005) (“Unlike
    the pleading requirements in the federal courts where notice pleading is the
    prevailing standard, the Florida Rules of Civil Procedures require fact pleading.
    To state a cause of action, a complaint must allege sufficient ultimate facts to
    show that the pleader is entitled to relief.” (citations omitted)). Furthermore, the
    trial court’s amended final judgment states that Seller did not argue for or provide
    proof of any damages.
    5
    

Document Info

Docket Number: 21-0356

Filed Date: 9/15/2021

Precedential Status: Precedential

Modified Date: 9/15/2021