RANSOM SIMMONS A/K/A RANSOM I. SIMMONS, APPELLANT/CROSS-APPELLEE,
v.
PRUDENTIAL CONSTRUCTION, INC., A FLORIDA CORPORATION, APPELLEE/CROSS-APPELLANT
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The court reversed a judgment finding the defendant liable for anticipatory breach of a construction contract. The contract was contingent on obtaining a mortgage commitment, but the commitment was unenforceable because the loan application contained a false statement of an inflated contract price in violation of federal law, meaning the contingency was never satisfied.
The defendant did not breach the contract because the mortgage commitment contingency was not fulfilled. The loan application violated federal law by containing a false statement of an inflated contract price, making the commitment unenforceable. The defendant, acting on counsel's advice, properly refused to close the loan based on the failed contingency.
[1] A contract contingency is not fulfilled when the underlying condition, such as obtaining a mortgage loan commitment, is based on a fraudulent loan application that violat…
[2] A violation of 18 U.S.C. …
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the commitment was not enforceable because the evidence established without contradiction that the loan application to the First National Bank of Venice was in violation of 18 U.S.C. § 1014 (1976), in that the application contained a false statement of an inflated contract price”
Establishes the basis for the unenforceable commitment and failed contingency
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Join FLexlaw to unlock all legal intelligenceSimmons contracted with Prudential Construction for residential construction. The contract was contingent upon Simmons obtaining a mortgage loan commi…
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PER CURIAM.
We reverse the final judgment holding defendant liable for the anticipatory breach of a contract for the construction of his residence.
The contract was contingent upon defendant obtaining a mortgage loan commitment. After two banks had rejected defendant’s loan application, the First National Bank of Venice issued what appeared to be the requisite commitment. However, we conclude that the commitment was not enforceable because the evidence established without contradiction that the loan application to the First National Bank of Venice was in violation of 18 U.S.C. § 1014 (1976), in that the application contained a false statement of an inflated contract price. See Hauer v. Thum, 67 So. 2d 643, 645 (Fla.1953); Thomas v. Ra-tiner, 462 So. 2d 1157, 1159 (Fla. 3d DCA 1985). Accordingly, the contingency in the contract was not fulfilled. It was on that basis that defendant, on advice of counsel sought and obtained after making the application to the First National Bank of Venice, refused to close the loan and to consummate the contract.
The contract price, as reflected in the loan application to the First National Bank of Venice, was not the contractually agreed upon price between plaintiff general contractor and defendant. The price reflected in that application had been enhanced by $32,000 over and above the price in a prior contract between the parties on the basis of which the two banks to whom prior loan applications had been made had turned down the applications. The testimony established that there had been no contract between the parties for that additional $32,-000. At best they had, according to plaintiff, simply in effect agreed to agree upon $32,000 in extras, which was not a binding agreement. See Brown v. Dobry, 311 So. 2d 159, 160 (Fla. 2d DCA 1975). Indeed, the calculation of the lost profit damages claimed and awarded was on the basis of the prior contract price.
Contrary to plaintiff’s argument, an element of a violation of the above-referenced statute is not detrimental reliance by a bank upon a false statement in a loan application. See United States v. Copple, 827 F. 2d 1182, 1187 (8th Cir.1987).
Reversed and remanded with directions to enter judgment for defendant.
SCHOONOVER, . A.C.J., and LEHAN and THREADGILL, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Thomas v. Edwin C. Ratiner, Franklin B. Glinn & Ratiner & Glinn, P.A., 462 So. 2d 1157 (Fla. 3d DCA 1984)
- Brown v. Dobry, 311 So. 2d 159 (Fla. 2d DCA 1975)
- Hauer v. Thum, 67 So. 2d 643 (Fla. 1953)
- United States v. Newton E. Copple, 827 F.2d 1182 (8th Cir. 1987)