ARTHUR RUTENBERG CORP., A FLORIDA CORPORATION, APPELLANT/CROSS APPELLEE,
v.
MITCHELL C. PASIN AND AUDREY R. PASIN, HIS WIFE, APPELLEES/CROSS APPELLANTS
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The court held that the trial court erred in interpreting the contract to allow the seller to retain the initial non-refundable deposit when the buyer failed to obtain a mortgage, as the contract's language regarding deposit return should be reconciled with the financing contingency.
[1] Where provisions in a contract appear to conflict, they should be construed to be reconciled if possible, giving effect to the intent of the parties as gleaned from the w…
[2] An agreement must receive a reasonable interpretation according to the intention of the parties at the time of execution, and where language is contradictory, the interpr…
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STONE, Judge.
The parties executed a contract for the purchase and sale of real property. The contract required an initial $5,000 “non-refundable” deposit and an “additional” deposit of $31,968 to be paid twenty days later. The contract also provided that “all deposits shall be returned to the buyer ...” if the buyer did not obtain a mortgage. After a non-jury trial, judgment was entered in favor of the buyer for the return of the “additional” deposit, and for the seller on the “non-refundable” initial deposit. The seller appeals and buyer cross appeals.
The contract was prepared by the developer-seller. The buyer insisted that the sale be subject to a financing contingency. The following language appeared in the same typewritten paragraph containing the “non-refundable” $5,000 deposit term:
Should this mortgage not be obtained, all deposits (emphasis added) shall be returned to the buyer, and all obligations of both buyer and seller shall terminate.
With respect to the $5,000 deposit, the trial court applied the rule of contract construction that specific directions in the contract take precedence over the general. This is one of many valid principles utilized in contract construction. White v. Harmon Glass Service of Florida, Inc., 316 So. 2d 599 (Fla. 4th DCA 1975), cert. denied, 330 So. 2d 22 (Fla.1976); 11 Fla.Jur. Contracts § 119 (1979). Because this issue was apparently considered incidental to the primary dispute over “good faith” in the mortgage application, neither the trial judge nor this court have been offered much assistance by counsel with respect to the application of principles of contract construction.
Having reviewed the record, however, we conclude that the court’s interpretation of the contract, and application of the aforementioned principle of construction, were erroneous. Cf Excelsior Ins. Co. v. Pomona Park Bar & Package Store, 369 So. 2d 938 (Fla.1979); James v. Gulf Life Ins. Co., 66 So. 2d 62 (Fla.1953); Home Savings of America, F.A. v. Roehner, 491 So. 2d 612 (Fla. 4th DCA 1986); Paddock v. Bay Concrete Industries, Inc., 154 So. 2d 313 (Fla. 2d DCA 1963). Since a full and complete final hearing has been held, no purpose would be served by a new trial.
A primary rule of contract construction is that where provisions in an agreement appear to conflict, they should be construed so as to be reconciled, if possible. Excelsior, 369 So. 2d at 938. In so doing, the court should strive to give effect to the intent of the parties in accord with reason and probability as gleaned from the whole agreement and its purpose. Excelsior, 369 So. 2d at 938; James, 66 So. 2d at 62; American Medical International, Inc. v. Scheller, 462 So. 2d 1 (Fla. 4th DCA 1984); Transport Rental Systems, Inc. v. Hertz Corp., 129 So. 2d 454 (Fla. 3d DCA 1961). See 4 Williston on Contracts, 3d Ed. §§ 618, 619, 620.
In James v. Gulf Life Ins. Co., 66 So. 2d 62 (Fla.1953), it was held that an isolated sentence in a contract should be construed in connection with the remainder of the contract “in order to arrive at a reasonable construction_” Id. at 62. The supreme court quoted 12 Am.Jur. Contracts § 250 with approval:
Agreements must receive a reasonable interpretation, according to the intention of the parties at the time of executing them, if that intention can be ascertained. ... Where the language of an agreement is contradictory ... so that it is susceptible of two constructions, one of which makes it fair, customary, and such as prudent men would naturally execute, while the other makes it inequitable, unusual, or such as reasonable men would not be likely to enter into, the interpretation which makes a rational and probable agreement must be preferred. ... An agreement will not be interpreted so as to render it oppressive or inequitable as to either party or so as to place one of the parties at the mercy of the other, unless it is clear that such was their intention at the time the agreement was made.
66 So. 2d at 63. Accord Triple E Development Co. v. Florida Gold Citrus Corp., 51 So. 2d 435 (Fla.1951); Florida Power Corp. v. City of Tallahassee, 154 Fla. 638, 18 So. 2d 671 (Fla.1944); American Medical International, 462 So. 2d at 1. In following these principles, courts should endeav-or to avoid interpretations which would contradict a contract’s general purpose. James, 66 So. 2d at 63, 64.
We conclude that it is not necessary here to rely on the interpretive tool of preferring a specific clause to a general clause. Therefore, we reverse as to the cross-claim, and remand for further proceedings.
It is reasonable to conclude that the parties intended that the $5,000 deposit would not be refunded if the buyer failed to put up the balance, failed to apply for the mortgage, or otherwise breached the contract before the contingencies were fulfilled. However, it is also reasonable to conclude that the $5,000 would be returned to the buyer if the financing contingency failed for reasons beyond his control. Certainly if a prudent seller bargained for a forfeiture, one would expect the contract to be more specific.
The trial court determined that the buyer exercised due diligence and good faith in seeking a mortgage. This conclusion was supported by the evidence, and no abuse of discretion has been shown. Cf. Biersbach v. Landin, Ltd., 454 So. 2d 779 (Fla. 4th DCA 1984); Brown v. Matton, 406 So. 2d 1269 (Fla. 4th DCA 1981); Meyers v. Cunningham, 415 So. 2d 802 (Fla. 3d DCA 1982).
Accordingly, we reverse and remand for modification of the final judgment as to the cross-claim by entering judgment for the buyer for the entire deposit. The award of costs in favor of the defendant is also reversed. That portion of the final judgment in favor of plaintiff is affirmed.
DOWNEY and WALDEN, JJ., concur.
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U.S.B. Acquisition Co., Inc. v. Stamm, 660 So. 2d 1075 (Fla. 4th DCA 1995)…raph 16. Every provision in a contract should be given meaning and effect and apparent inconsistencies reconciled if possible. Excelsior Ins. Co. v. Pomona Park Bar and Package Store, 369 So. 2d 938, 941 (Fla.1979); Arthur Rutenberg Corp. v. Pasin, 506 So. 2d 33, 34 (Fla. 4th DCA 1987). If clauses in a contract appear to be repugnant to each other, they must be given such an interpretation and construction as will reconcile them if possible. Triple E Dev. Co. v. Floridagold Citrus Corp., 51 So. 2d 435, 438-…
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Seabreeze Rest., Inc. v. Gaethy Paumgardhen, 639 So. 2d 69 (Fla. 2d DCA 1994)…sidered part of the agreement. See OBS Co. v. Pace Constr. Corp., 558 So. 2d 404, 406 (Fla.1990). When provisions in a contract appear to be in conflict, they should be construed so as to be reconciled, if possible. Arthur Rutenberg Corp. v. Pasin, 506 So. 2d 33 (Fla. 4th DCA 1987). “An interpretation of a contract which gives a reasonable, lawful and effective meaning to all of the terms is preferred to an interpretation which leaves a part unreasonable, unlawful ór of no effect.” Herian v. Southeast Bank,…
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Waksman Enters., Inc. v. Or. Props., Inc., 862 So. 2d 35 (Fla. 2d DCA 2003)…the building permit. In March 2002, the trial court entered a nonfinal order granting Oregon’s motion for summary judgment. The trial court found that the facts of the instant case were similar to those involved in Arthur Rutenberg Corp. v. Pasin, 506 So. 2d 33 (Fla. 4th DCA 1987), and ruled that, “in the absence of clear language in the contract allowing [Waksman] to retain the deposit,” Oregon was entitled to a full refund. The order also cited cases enunciating the proposition that “the law abhors a for…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited (13 total)
- Excelsior Ins. Co. v. Pomona Park BAR & Package Store, 369 So. 2d 938 (Fla. 1979)
- Paddock v. BAY Concrete Indus., Inc., 154 So. 2d 313 (Fla. 2d DCA 1963)
- James v. Gulf Life Ins. Co., 66 So. 2d 62 (Fla. 1953)
- Am. Med. Int'l, Inc. v. Zbigniew Scheller, 462 So. 2d 1 (Fla. 4th DCA 1984)
- Fla. Power Corp. v. City OF Tallahassee, 154 Fla. 638 (Fla. 1944)
- Triple E Dev. Co. v. Floridagold Citrus Corp., 51 So.2d 435 (Fla. 1951)
- Transp. Rental Sys., Inc. v. HERTZ Corp., 129 So. 2d 454 (Fla. 3d DCA 1961)
- Meyers v. Cunningham, 415 So. 2d 802 (Fla. 3d DCA 1982)
- Brown v. Matton, 406 So. 2d 1269 (Fla. 4th DCA 1981)
- Home Sav. OF Am. v. Roehner, 491 So. 2d 612 (Fla. 4th DCA 1986)