TERRACES OF BOCA ASSOCIATES, A FLORIDA GENERAL PARTNERSHIP, CONSISTING OF BOCADEV CORP., INC., POINTEDEV INC., GALLIGO REALTY, INC., BTA ENTERPRISES, INC., P911, INC., HODU ACRES, N.V. AND ZEMBRA INVESTMENTS, N.V., APPELLANTS,
v.
ANSEL GLADSTEIN AND RUTH R. GLADSTEIN, HIS WIFE, APPELLEES
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Terraces of Boca, a condominium seller, appealed a trial court judgment awarding buyers the return of their deposit and attorney's fees after the court found the purchase contract's liquidated damages clause unenforceable due to lack of mutuality. The appellate court affirmed the return of the deposit but reversed the attorney's fee award.
The liquidated damages clause was unenforceable because it lacked mutuality of obligation, as it gave the seller multiple remedy options (retain deposit, pursue equitable remedies, or bring an action for actual damages) while limiting buyers to a single remedy (return of deposit). Accordingly, buyers are entitled to return of their deposit. However, the attorney's fee award was improper under both applicable statutory provisions.
[1] A liquidated damages clause in a real estate purchase contract is unenforceable as a matter of law if it lacks mutuality of obligation, conferring unilateral benefit upon…
[2] A liquidated damages clause is invalid if it provides the seller with the option of retaining the deposit while also allowing the seller to pursue equitable remedies or a…
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Join FLexlaw to unlock all legal intelligence“the liquidated damage provision of the purchase contract is invalid because it provided seller with the option of retaining the deposit but did not preclude seller from pursuing equitable remedies or from bringing an action at law for actual damages. In contrast, the purchase contract expressly limited buyers to the exclusive remedy of terminating the contract and receiving their deposit back.”
Establishes the core holding that lack of mutuality—unequal remedy alternatives for the two parties—renders the liquidated damages clause unenforceable.
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Join FLexlaw to unlock all legal intelligenceBuyers contracted to purchase a condominium from Terraces of Boca. The seller notified the buyers of default and sought to retain their deposit pursua…
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GUNTHER, Judge.
Appellant/seller appeals an amended final judgment rendered in favor of appel-lees/buyers. We affirm in part and reverse in part.
Buyers contracted with seller to purchase a condominium. Thereafter, seller notified buyers that they were in default and that, pursuant to the terms of the purchase contract, the seller had elected to retain all of buyers’ deposit.
Buyers responded by filing a complaint seeking a return of their deposit on the theory that the liquidated damages clause of the contract was unenforceable because it lacked mutuality. The trial court, on summary judgment, ruled that as a matter of law the contract was invalid, inequitable, and unenforceable inasmuch as it lacked mutuality.
In Cortes v. Adair, 494 So. 2d 523 (Fla. 3d DCA 1986), the court examined a liquidated damages clause which gave the seller the right to choose between pursuing an action at law or electing to retain the deposit in a contract for the purchase of real property. The court held that the clause was unenforceable as a matter of law because it conferred upon the seller the unilateral benefit of choosing the avenue of relief following a breach. Cortes, 494 So. 2d at 524.
In the instant case, the liquidated damage provision of the purchase contract is invalid because it provided seller with the option of retaining the deposit but did not preclude seller from pursuing equitable remedies or from bringing an action at law for actual damages. In contrast, the purchase contract expressly limited buyers to the exclusive remedy of terminating the contract and receiving their deposit back. Since there is an unreasonable disparity in remedy alternatives available to seller and buyers, the trial court correctly ruled that the liquidated damages clause was unenforceable because it lacked mutuality of obligation. Therefore, the buyers are entitled to the return of their deposit.
However, we reverse the attorney’s fee awarded to buyers. Although the trial court did not specify whether fees were awarded pursuant to section 718.125, Florida Statutes (1987), or section 57.105, Florida Statutes (1986), an award under either section would be incorrect in the instant case.
Since buyers were only potential purchasers of a condominium unit and not a unit owner for purposes of section 718.125, the trial court erred if it awarded fees under this section. Turnberry Towers Corp. v. Mechoulam, 425 So. 2d 1180 (Fla. 3d DCA 1983). Furthermore, an award of attorney’s fees under section 57.105 would also be error because there was not a complete lack of a justiciable issue before the trial court.
AFFIRMED IN PART AND REVERSED IN PART.
ANSTEAD and GLICKSTEIN, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
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Lefemine v. Baron, 556 So. 2d 1160 (Fla. 4th DCA 1990)…ller defaulted. In any event, to the extent that it is in conflict with our conclusion in the case sub judice, we reject the rationale of Cortes. It is true that this court cited Cortes in the recent case of Terraces of Boca Associates v. Gladstein, 543 So. 2d 1303 (Fla. 4th DCA 1989). However, the Terraces holding clearly was based on the “unreasonable disparity in remedy alternatives available to seller and buyers.” Id. at 1304. See also Ocean Dunes of Hutchinson Island Development Corp. v. Colangelo, 463 So…
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Idevco, Inc. v. Hobaugh, 571 So. 2d 488 (Fla. 2d DCA 1990)…void for lack of mutuality of remedy, and thus, the Hobaughs- were entitled to the return of their deposit, even though they breached the agreement. See Clone, Inc. v. Orr, 476 So. 2d 1300 (Fla. 5th DCA 1985); Terraces of Boca Assocs. v. Gladstein, 543 So. 2d 1303 (Fla. 4th DCA 1989). Cf. Lefemine v. Baron, 556 So. 2d 1160 (Fla. 4th DCA), jurisdiction accepted, 564 So. 2d 487 (Fla.1990) (default provisions of condominium purchase agreement were not disparate in remedies available to buyer and seller). We als…
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Buccaneer's Roost Ltd. v. Weaver, 608 So. 2d 893 (Fla. 2d DCA 1992)…eir merits. Reversed and remanded. SCHOONOVER, A.C.J., and HALL, J., concur. . See Hackett v. J.R.L. Dev., Inc., 566 So. 2d 601 (Fla. 2d DCA 1990); IDEVCO, Inc. v. Hobaugh, 571 So. 2d 488 (Fla. 2d DCA 1990); Terraces of Boca Assocs. v. Gladstein, 543 So. 2d 1303 (Fla. 4th DCA 1989).…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Augusto Cortes and Mary Cortes v. Adair, 494 So. 2d 523 (Fla. 3d DCA 1986)
- Turnberry Towers Corp. v. Mechoulam, 425 So. 2d 1180 (Fla. 3d DCA 1983)