S.P.G. GEM CORP., A NEW YORK CORPORATION, SUSHIL GODIKA AND MAMTA GODIKA, HIS WIFE, APPELLANTS,
v.
PETER WOLOFSKY, SYDNEY WOLOFSKY, KENNETH WOLOFSKY, MEL SCHUSTER, SNW CORP., PNW CORP., AND KNW CORP., AND JEFFREY M. PERLOW, P.A., APPELLEES

Fla. 4th DCA | 1986-02-19
No. 84-2679
ANSTEAD, J., and BARKETT, ROSEMARY, and HURLEY, DANIEL T.K., Associate Judges, concur.
488 So. 2d 835 Florida District Court of Appeal, Fourth District (1986) Negative Treatment
Cited by 2 cases

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Holding

The court held that the purchasers were entitled to rescission of the option contracts due to the parol evidence rule, but not rescission for the two units where deeds were executed, as the parties had fully performed.


Headnotes

[1] The parol evidence rule bars admission of extrinsic evidence to vary the terms of an unambiguous written contract.

[2] Extrinsic evidence may be considered to interpret ambiguous contract provisions, but not to create ambiguity or alter contractual obligations.

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Facts & Procedural History

Purchasers entered into agreements for condominium units, paying with gems. Deeds for two units were executed but not recorded due to an alleged oral …

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Opinion of the Court
PER CURIAM.

PER CURIAM.

Appellees (developers) are in the business of selling condominiums. The appellants (purchasers) selected eleven of the developers’ units to purchase. The parties executed deeds, mortgages, and closing documents for two of the units and “option agreements” for the others. The consideration paid consisted of gems which were valued and allocated among the various units. All deeds, mortgages, notes, options, and closing documents were executed by the parties and delivered to the developers’ lawyer. The purchaser obtained possession of the two deeded units and made some improvements thereto.

The deeds and mortgages pertaining to the two purchased units were not recorded because the developers’ lawyer claimed he was under escrow instructions not to do so until the purchasers made the initial payment due on all the option agreements, i.e., purchasers would have to exercise the options on all the optioned units. The purchasers deny any such agreement and claim that the failure to record constituted a basis for rescission of all the transactions and a return of all gemstones.

The purchasers sued the developers seeking rescission, replevin, damages, specific performance and declaratory relief. At trial, the plaintiffs elected to pursue rescission in lieu of specific performance. The trial court found the purchasers to be in default and denied them relief.

We consider first the option contracts. Paragraph 21 of each of the separate option agreements provides:

21. This agreement represents the entire agreement between the parties hereto, and supersedes all prior agreements which shall henceforth become null and void. There are no collateral or oral agreements or understandings.

In light of this provision, the purchasers correctly argue that the admission of evidence of an alleged oral agreement varying the terms of these option agreements violates the parol evidence rule and was error. See Lemon v. Aspen Emerald Lakes Associates, Ltd., 446 So. 2d 177, 180 (Fla. 5th DCA 1984); Carlon, Inc. v. Southland Diversified Company, 381 So. 2d 291, 293 (Fla. 4th DCA 1980). As this court explained in J.C. Penney Company v. Koff, 345 So. 2d 732, 735 (Fla. 4th DCA 1977), courts may “consider extrinsic evidence only when confronting an ambiguous contract provision, and they are barred from using evidence to create an ambiguity to rewrite a contractual provision, or to vary a party’s obligation under a contract.” Accordingly, the purchasers are entitled to rescission of the option contracts and to the return of the gemstones allocated for these nine contracts.

We next consider whether the failure to record the deeds and mortgages to the two remaining units because of the alleged oral agreement not to record until certain payments on the option agreements were made constitutes a sufficient basis for rescission on that transaction.

The trial court found the purchasers in default and denied them the remedy of rescission. The purchasers contend that this is error, alleging that it was the developers who had anticipatorily breached the agreement by failing to record. The purchasers also argue that enforcement of the alleged oral agreement not to record constitutes a violation of the Statute of Frauds.

We first note that the deeds and mortgages pertaining to the two units in question were not preceded by any written agreement for deed. Although the enforcement of the alleged oral agreement not to record until payments were made on another transaction may constitute a violation of Statute of Frauds as alleged by the purchasers, we find that irrelevant to the issues here. The developers did not seek enforcement of any oral agreement. It was the purchasers who sued for rescission. The developers had conveyed the executed deeds to purchasers’ attorney who then returned them to the developers’ attorney for recording. The developers had wronged the purchasers by failing to record the deeds and mortgages. The purchasers’ remedy for this wrong is not rescission, however, because there was no contract to rescind. Both parties had fully performed. The purchasers had made certain payments and obligated themselves for remaining payments by promissory notes and mortgages. The developers had executed deeds to the two units and had conveyed possession to the purchasers.

The purchasers sought rescission only as a vehicle to remedy the failure of the developers to record. The developers did not sue for foreclosure or for any other form of affirmative relief. Although we find that the trial court correctly denied the purchasers’ claim for rescission, the court erred in finding the purchasers to be in default and permitting the developers to retain all the gemstones allocated to these two units, apparently as some sort of liquidated damages.

Accordingly, we reverse and remand with the following directions: (1) As to the nine units under the option contracts, the court shall order the return of the gemstones allocated under the option contracts in accordance with a finding of rescission thereto; (2) As to the two units for which deeds and mortgages have been executed, the developers shall record same and shall be given the opportunity to plead appropriately for any monies due under these documents.

REVERSED AND REMANDED FOR FURTHER PROCEEDINGS IN ACCORDANCE HEREWITH.

ANSTEAD, J., and BARKETT, ROSEMARY, and HURLEY, DANIEL T.K., Associate Judges, concur.


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Citator

Cited By

  • Rufus Palmer, M.D. v. Santa FE Healthcare Sys., Inc., 582 So. 2d 1234 (Fla. 1st DCA 1991)
    …hat “there are no other agreements,” and that any change must be approved in writing. The written agreement is unambiguous and, especially in light of the integration clause, may not be expanded by oral statements. See S.P.G. Gem Corp., v. Wolofsky, 488 So. 2d 835 (Fla. 4th DCA 1986). The record does not suggest that Santa Fe breached any continuing obligation imposed by the express written agreement, and the court properly entered a summary judgment on this count. The appellant’s claim of fraud requires a k…

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