MARTIN GOPMAN, APPELLANT,
v.
THOMAS J. NORTHCUTT, INDIVIDUALLY AND AS TRUSTEE, AND JUSTIN BUILDING CORPORATION, A FLORIDA CORPORATION, D/B/A JUSTIN/NORTHCUTT JOINT VENTURE, APPELLEES
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A deposit forfeiture clause in a real estate contract is enforceable as liquidated damages, but summary judgment was improper because factual questions remain about whether enforcement would be unconscionable given the seller's resale at a higher price.
Although a liquidated damages clause in a real estate contract may be valid and enforceable, summary judgment is inappropriate when facts exist suggesting enforcement would be unconscionable.
[1] A liquidated damages clause in a real estate contract may be valid and enforceable, but summary judgment is inappropriate when post-default circumstances create a factual…
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Join FLexlaw to unlock all legal intelligence“Even though appellee has established that the contract, as a matter of law, contains an enforceable liquidated damages clause, there still remains a disputed question of fact as to whether circumstances subsequent to the default demonstrate that it would be unconscionable to allow the seller to retain, as liquidated damages, all the deposit and "extras" added to the house while under construction.”
Court explaining why summary judgment was inappropriate despite the validity of the forfeiture clause
Gopman defaulted on a real estate purchase contract containing a forfeiture provision for the deposit (13% of contract price) and extras added during …
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FERGUSON, Judge.
Appellant/purchaser, suing for return of a deposit on a contract containing a provision for forfeiture in the event of breach, demonstrated by pleading and affidavit that (1) his default resulted from an unfortunate inability to perform, (2) the size of the deposit and other contributions which were subject to the forfeiture were large (13%) when compared to the amount of the contract, and (3) the sellers resold the property within ninety days after default for $23,000 more than the contract price. The trial court held that the deposit forfeiture clause was valid, however, that determination was not dispositive of the case.
Even though appellee has established that the contract, as a matter of law, contains an enforceable liquidated damages clause, there still remains a disputed question of fact as to whether circumstances subsequent to the default demonstrate that it would be unconscionable to allow the seller to retain, as liquidated damages, all the deposit and “extras” added to the house while under construction. See Hutchinson v. Tompkins, 259 So. 2d 129 (Fla.1972); Hyman v. Cohen, 73 So. 2d 393 (Fla.1954); McNorton v. Pan American Bank of Orlando, 387 So. 2d 393 (Fla. 5th DCA 1980); Bruce Builders, Inc. v. Goodwin, 317 So. 2d 868 (Fla. 4th DCA 1975). Summary judgment was, therefore, inappropriate. Holl v. Talcott, 191 So. 2d 40 (Fla.1966).
Affirmed in part, reversed in part and remanded for further proceedings.
Cases With Similar Vibessemantic neighbors from the corpus
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- Gory Roofing Tile Mfg., Inc. v. Davison, 191 So. 2d 40 (Fla. 1966)
- Hutchison v. Tompkins, 259 So. 2d 129 (Fla. 1972)
- Hyman v. Cohen, 73 So. 2d 393 (Fla. 1954)
- Maounis v. Igor Shamis (Fla. 3d DCA 2023)
- Bruce Builders, Inc. v. Goodwin, 317 So. 2d 868 (Fla. 4th DCA 1975)
- McNORTON v. PAN Am. Bank OF Orlando, N.A., 387 So. 2d 393 (Fla. 5th DCA 1980)