KONOVER REALTY ASSOCIATES, LTD., HAROLD KONOVER AND KONOVER HOTELS CORPORATION, APPELLANTS,
v.
DAVID MLADEN, APPELLEE
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In a contract dispute over a hotel purchase, the trial court ordered sellers to deposit $500,000 (the buyer's deposit) into the court registry pending resolution of the case. The appellate court reversed, holding that Florida law does not permit courts to order deposit of funds in controversy into the court registry in actions at law for money damages, regardless of concerns about asset dissipation.
A trial court has no judicial authority to order deposit of funds in controversy into the court registry in an action at law for money damages, nor to impose any restraint upon a defendant's unrestricted assets prior to entry of judgment. This rule applies regardless of claims that recovery may be made difficult by the debtor's dissipation or unreachability of assets, and applies specifically to actions for recovery of earnest money.
[1] In an action at law for money damages, there is no judicial authority for an order requiring the deposit of the amount in controversy into the registry of the court.
[2] A court cannot restrain the use of a defendant's unrestricted assets prior to the entry of judgment.
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Join FLexlaw to unlock all legal intelligence“It is entirely settled by a long and unbroken line of Florida cases that in an action at law for money damages, there is simply no judicial authority for an order requiring the deposit of the amount in controversy into the registry of the court”
Establishes the core holding that trial courts lack authority to order court deposits in money damages actions
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Join FLexlaw to unlock all legal intelligenceMladen agreed to purchase the Konover Hotel and made a $500,000 unrestricted deposit payment to the sellers, to be applied to the purchase price at cl…
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SCHWARTZ, Chief Judge.
Pursuant to a contract under which the appellee Mladen agreed to purchase and the appellants to sell the Konover Hotel on Miami Beach, Mladen made a $500,000 unrestricted deposit payment1 to the sellers to be applied to the purchase price at closing. The deal did not close and each side claimed that the other was in default. The purchaser then brought this action to recover a $500,000 money judgment in the amount of the deposit. The sellers counterclaimed that they were entitled to retain the sum as liquidated damages for what they said was the buyer’s breach and for other relief. In the course of the litigation, which is to be resolved by jury trial, Mla-den, on the asserted ground that the individual seller, Harold Konover, “is in serious health [sic[k]]” and that “in the event of [his] death, this money would be tied up in his estate,” moved for and the trial court entered an order requiring the defendants- sellers to deposit $500,000 in the court registry pending the outcome of the case.
We review this order under Fla.R.App.P. 9.130(a)(3)(B) as one granting an injunction,2 Action Electric & Repair, Inc. v. Batelli, 416 So. 2d 888 (Fla. 4th DCA 1982); see Ramos v. Stabinski & Funt, P.A., 494 So. 2d 298 (Fla. 3d DCA 1986), and summarily reverse. It is entirely settled by a long and unbroken line of Florida cases that in an action at law for money damages, there is simply no judicial authority for an order requiring the deposit of the amount in controversy into the registry of the court, Ramos, 494 So. 2d at 298; Law v. NCNB National Bank of Florida, 452 So. 2d 1119 (Fla. 4th DCA 1984); Wincast Associates, Inc. v. Hickey, 320 So. 2d 17 (Fla. 4th DCA 1975), or indeed for any restraint upon the use of a defendant’s unrestricted assets3 prior to the entry of judgment. Stewart v. Manget, 132 Fla. 498, 181 So. 370 (1938); Leight v. Berkman, 483 So. 2d 476 (Fla. 3d DCA 1986); Stading v. Equilease Corp., 471 So. 2d 1379 (Fla. 4th DCA 1985); Ciabotti v. Milo, 432 So. 2d 792 (Fla. 3d DCA 1983); Supreme Service Station Corp. v. TeleCredit Service Center, Inc., 424 So. 2d 844 (Fla. 3d DCA 1982).
The rule has been specifically applied, as on general principles it must be, to an action like this one for the recovery of unsegregated earnest money, Digaeteno v. Perotti, 374 So. 2d 1015 (Fla. 3d DCA 1979), and is unequivocally not affected by the claim that recovery upon any subsequently-entered judgment may be made difficult by the dissipation or un-reachability of the debtor’s assets.4’5 Leight, 483 So. 2d at 476; Oxford International Bank and Trust, Ltd. v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 374 So. 2d 54 (Fla. 3d DCA 1979), cert. dismissed, 383 So. 2d 1199 (Fla.1980).
Reversed.
. No escrow fund was established with the broker or anyone else. $500,000 was simply paid to the sellers.
.We need not squarely decide, although we incline to that view, that an order requiring such a court deposit (or establishing a receivership) is reviewable also under Fla.R.App.P. 9.130(a)(3)(C)(ii) as one determining the right to the immediate possession of property. Thunderbird, Ltd. v. Great American Insurance Co., 470 So. 2d 2 (Fla. 1st DCA 1985). We note that in Florida Reinvestment Corp. v. Cypress Savings Ass’n, 509 So. 2d 1352 (Fla. 4th DCA 1987), the fourth district has overruled its previously held view to the contrary in Mann v. Stein, 379 So. 2d 978 (Fla. 4th DCA 1980) (order reviewable under (C)(ii) only if possession is granted to opposing party), cert. denied, 389 So. 2d 1112 (Fla.1980).
. See supra note 1.
. We note that the principle is applicable even when, as in Leight, it seems clear that the plaintiff will eventually actually recover a judgment. In this case, it is far from certain that Mladen will prevail in the underlying litigation.
. The appellee has not attempted to conform to the requirements of the remedy which would satisfy his alleged concerns, prejudgment attachment. §§ 76.01-.32, Fla.Stat. (1985); Leight, 483 So. 2d at 476.
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CMR Distribs., Inc. v. The Resolution Tr. Corp. for Prof'l Fed. Sav. Bank, 593 So. 2d 593 (Fla. 3d DCA 1992)…ds of the guarantors. An order requiring the deposit of funds into the registry of the court prior to judgment is, in effect, an order granting an injunction and is thus reviewable under Fla.R.App. P. 9.130(a)(3)(B). Konover Realty Assoc. v. Mladen, 511 So. 2d 705 (Fla. 3d DCA 1987). The order on appeal is thus reviewable as an interlocutory order. See e.g., Hernandez v. Travelers Ins. Co., 356 So. 2d 1342 (Fla. 3d DCA 1978) (district court of appeal entertained, without discussion of jurisdiction, appeal fro…
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Cohen Fin., LP v. Kmc/Ec II, LLC, 967 So. 2d 224 (Fla. 3d DCA 2007)…port Executive Towers v. CIG Realty, Inc., 716 So. 2d 311, 312 (Fla. 3d DCA 1998)(reversing trial court’s order granting temporary injunction in breach of contract action where adequate remedy at law existed); Konover Realty Assocs., Ltd. v. Mladen, 511 So. 2d 705, 706 (Fla. 3d DCA 1987)(“It is entirely settled by a long and unbroken line of Florida cases that in an action at law for money damages, there is simply no judicial authority for an order requiring the deposit of the amount in [*228] controversy int…
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Castillo v. de Castillo, 701 So. 2d 1198 (Fla. 3d DCA 1997)…n is clearly distinguishable from such cases as Oxford Int’l Bank & Trust, Ltd. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 374 So. 2d 54 (Fla. 3d DCA 1979), cert. dismissed, 383 So. 2d 1199 (Fla.1980) and Konover Realty Assocs., Ltd. v. Mladen, 511 So. 2d 705 (Fla. 3d DCA 1987), which hold that pretrial injunctions or other restraints upon the dissipation of property, which serve merely to preserve funds for execution upon an eventual judgment, are unavailable in an action for money damages alone. The…
Previewing 3 of 31 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited (18 total)
- Oxford Int'l Bank & Tr., Ltd. v. Merrill Lynch, 374 So. 2d 54 (Fla. 3d DCA 1979)
- Harris v. Fla. Dep't OF Labor & Emp. Sec., 374 So. 2d 54 (Fla. 3d DCA 1979)
- Stewart v. Manget, 132 Fla. 498 (Fla. 1938)
- Fla. Reinvestment Corp. v. Cypress Sav. Ass'n, 509 So. 2d 1352 (Fla. 4th DCA 1987)
- Supreme Serv. Station Corp. v. Telecredit Serv. Ctr., Inc., 424 So. 2d 844 (Fla. 3d DCA 1982)
- Digaeteno v. Sandro Perotti, 374 So. 2d 1015 (Fla. 3d DCA 1979)
- Action Elec. & Repair, Inc. v. Batelli, 416 So. 2d 888 (Fla. 4th DCA 1982)
- Thunderbird, Ltd. v. Great Am. Ins. Co., 470 So. 2d 2 (Fla. 1st DCA 1985)
- Leight v. Berkman, 483 So. 2d 476 (Fla. 3d DCA 1986)
- State v. Brewington, 320 So. 2d 17 (Fla. 2d DCA 1975)