940 Lincoln Road Associates, LLC v. 940 Lincoln Road Enterprises, Inc. , 237 So. 3d 1099 ( 2017 )

Third District Court of Appeal
State of Florida
Opinion filed December 27, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D16-2748
Lower Tribunal Nos. 13-4200 & 13-4203
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940 Lincoln Road Associates LLC, et al.,
Appellants,
vs.
940 Lincoln Road Enterprises, Inc., et al.,
Appellees.
An Appeal from the Circuit Court for Miami-Dade County, Migna Sanchez-
Llorens, Judge.
Legon Fodiman, P.A., and Todd R. Legon and William F. Rhodes, for
appellants.
Foley & Lardner LLP, and William E. Davis, Mary Leslie Smith and Natalia
M. Salas; Schlesinger & Associates, P.A., and Michael J. Schlesinger and Joshua
B. Bochner; Greenberg Traurig, P.A., and Julissa Rodriguez and Stephanie L.
Varela, for appellees.
Before SUAREZ, SCALES and LINDSEY, JJ.
SCALES, J.
940 Lincoln Road Associates LLC and CA 947 Lincoln Road LLC
(collectively “Buyers”) appeal the grant of final summary judgment in favor of 940
Lincoln Road Enterprises, Inc., 947 Lincoln Road Investments, Inc., and Leon
Zwick (collectively “Sellers”) on Buyers’ claims related to two failed commercial
real estate deals. Buyers also appeal separate orders dissolving their lis pendens
against the commercial properties that are the subject of the underlying action. For
the following reasons, we affirm in all respects.
I. RELEVANT FACTS AND FACTUAL BACKGROUND
The relevant facts are not in dispute.
In May 2012, Buyers entered into agreements with Sellers to purchase two
separate commercial properties located in the pedestrian Lincoln Road mall area of
Miami Beach. When it became apparent that neither closing would take place as
scheduled (on December 28, 2012 and January 7, 2013), Buyers exercised their
contractual rights to terminate the subject purchase and sale agreements and
received a return of their deposits. Both termination letters provided that Buyers
were terminating the agreements because: (i) Sellers had not complied with certain
conditions set forth in the agreements with respect to the removal of existing
tenants prior to closing; and (ii) Sellers could not deliver clear title at closing
because notices of lis pendens had been recorded against the subject properties by
Zwick’s sister, Bejla Miller, who had filed the two lis pendens in an action in the
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Miami-Dade Circuit Court, wherein she claimed an ownership interest in the
subject properties.
Buyers claim that when they decided to terminate the subject purchase and
sale agreements, Sellers’ representatives had orally promised that Sellers would
sell the subject properties to Buyers under the same terms and conditions,
including price, but with a new closing date, “once the dust settled” from Bejla
Miller’s litigation (the “oral reset agreement”). The alleged oral reset agreement
was neither referenced in the letters of termination, however, nor ever reduced to
writing. In November 2013, in the case brought by Bejla Miller, the trial court
entered final summary judgment in favor of Sellers. Sellers did not thereafter sell
the subject properties to Buyers pursuant to the oral reset agreement. Instead,
Sellers sold the properties to a third party, Richard Chera. There was evidence
introduced below that Sellers had negotiated the sale of the subject properties to
Chera prior to Buyers’ termination of the May 2012 purchase and sale agreements,
which, if true, would have been a violation of the exclusivity provision of the May
2012 purchase and sale agreements.1
Several months after Buyers terminated the purchase and sale agreements,
Buyers filed two nearly identical actions against Sellers, which were later
1 The relevant portion of the subject agreements’ exclusivity provision provides
that “Seller shall not solicit, enter into any contract or negotiations . . . regarding
the Property with any other party commencing on the date hereof and continuing
thereafter until the Closing or termination of this Agreement.”
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consolidated, and filed notices of lis pendens against the subject properties. The
Third Amended Complaints allege claims for specific performance (count I),
declaratory relief (count II), injunctive relief (count III), fraud (count IV), fraud in
the inducement (count V), negligent misrepresentation (count VI), rescission
(count VII), and breach of contract (count VIII). All of the claims are based on the
common allegations that: (i) Sellers had represented they could deliver clear and
marketable title for the subject properties when Sellers knew they could not do so
because of Bejla Miller’s claim to an ownership interest in the properties; (ii)
Sellers had negotiated the sale of the subject properties with Richard Chera while
Sellers were still under contract with Buyers in violation of the May 2012 purchase
and sale agreements’ exclusivity provisions; and (iii) under the oral reset
agreement, Sellers had agreed to sell the subject properties to Buyers after the
lawsuit with Miller was resolved. Essentially, Buyers’ complaints allege Buyers
were fraudulently induced to terminate the contracts; Buyers seek to revoke
Buyers’ terminations and reinstate the contracts.
After holding a hearing on Sellers’ motions for summary judgment, the trial
court entered separate orders granting summary judgment in favor of Sellers on all
claims. The trial court separately entered orders dissolving the lis pendens against
each of the subject properties, and on November 20, 2016, entered a final judgment
for Sellers which Buyers timely appealed.
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II. ANALYSIS
Applying the de novo standard of review on appeal, we affirm. See Tropical
Glass & Constr. Co. v. Gitlin, 13 So. 3d 156, 158 (Fla. 3d DCA 2009) (“The
standard of review for summary judgment is de novo. . . . Additionally, a trial
court’s decision construing a contract presents an issue of law that is subject to the
de novo standard of review.”).
First, we find that final summary judgment was properly entered against
Buyers on their claim for breach of contract (count VIII). As already stated,
because Sellers had removed neither the properties’ existing tenants nor Bejla
Miller’s lis pendens, Buyers expressly and unequivocally terminated the May 2012
purchase and sale agreements and received their deposits – as was their contractual
right.2 By doing so, we agree with the trial court that Buyers selected their remedy
under the default provision of the subject agreements.3 Because Buyers chose their
The subject agreements provided that if Sellers could not deliver clear title
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to the subject properties at closing, Buyers had “the option of either (i) terminating
this Agreement, in which event Escrow Agent shall pay the Deposit to Purchaser
whereupon neither party shall have any further rights or obligations hereunder or
(ii) accepting such title as Seller shall be able to convey, with a reduction of the
Purchase Price . . . .” (Emphasis added). Similarly, the subject agreements
provided that if Sellers could not satisfy the delivery conditions with respect the
removal of existing tenants by the time of closing, Buyers “may terminate this
Agreement upon written notice served on Seller on or before the Closing Date, in
which event the Deposit, together with interest thereon but less than the actual
amount of Rental Loss Reimbursement . . . shall be refunded to Purchaser and
thereafter this Agreement shall be deemed terminated and of no force or effect
except for those provisions intended to survive Closing.” (Emphasis added).
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contractual remedy to terminate and receive a return of their deposits, we agree
with the trial court that Buyers affirmatively forfeited their right to bring the instant
breach of contract action against Sellers.
As to counts I, II, III, V, VI, and VII – all of which sound in fraud and are
based on the alleged oral reset agreement – we agree with the trial court that those
claims must fail because of the statute of frauds. It is well settled that a party
cannot avoid the writing requirement of the statute of frauds by reformulating what
amounts to a breach of an oral contract claim into a fraud claim. See, e.g., Cohen v.
Corbitt, 135 So. 3d 527, 530 (Fla. 1st DCA 2014) (“Appellee cannot avoid the
statute of frauds simply by couching her claim in terms of the tort of fraudulent
misrepresentation rather than breach of an oral contract.”); LynkUS Commc’ns,
Inc. v. WebMD Corp., 965 So. 2d 1161, 1166 (Fla. 2d DCA 2007) (“[U]nder the
statute of frauds, ‘an action for damages cannot be maintained on the ground of
fraud in refusing to perform the [oral] contract, even though the defendant at the
time of the making of the oral contract may have had no intention of performing
it.’” (quoting Canell v. Arcola Housing Corp., 65 So. 2d 849, 851 (Fla. 1953)));
Ashland Oil, Inc. v. Pickard, 269 So. 2d 714, 721 (Fla. 3d DCA 1972) (“The
3 The default provision of the purchase and sale agreements provided that, in the
event the Sellers failed to cure any default in their obligations, Buyers’ “(i) [had]
the right to terminate this Agreement and receive the return of the Deposit, or (ii)
[had] the right to have all remedies at law and in equity, including, without
limitation, specific performance . . . .” (Emphasis added).
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Florida rule is that the statute of frauds may not be avoided by a suit for fraud
based on oral representations[.]”).
As to count IV – which was based on allegations that Sellers had
misrepresented that they could deliver good and marketable title to Buyers – we
agree with the trial court that this claim must fail because: (i) delivery of clear title
was part of the express terms of the subject agreements; and (ii) there was no
evidence that Sellers did not intend to comply with their contractual obligations to
convey clear title at the time they entered into the subject agreements. See
Alexander/Davis Props., Inc. v. Graham, 397 So. 2d 699, 706 (Fla. 4th DCA 1981)
(“As a general rule, fraud cannot be predicated upon a mere promise not
performed. However, under certain circumstances, a promise may be actionable as
fraud where it can be shown that the promissor had a specific intent not to perform
the promise at the time the promise was made, and the other elements of fraud are
established.”) (citations omitted).
For these reasons, we affirm the orders on review granting final summary
judgment in favor of Sellers. Final summary judgment having been properly
entered, we also affirm the orders dissolving Buyers’ lis pendens against the
commercial properties that are the subject of this consolidated action.
Affirmed.
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