FRANCISCO L. PADRON AND JOANNE E. PADRON, APPELLANTS,
v.
CARLOS PLANTADA, APPELLEE
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A mortgage broker sued borrowers for breach of contract after they rejected his loan commitment offer and obtained financing elsewhere. The court reversed the judgment in the broker's favor, holding that the broker's offer of a floating-rate loan did not comply with the contract requirement for a fixed 10% rate, constituting a nonconforming counteroffer that the borrowers properly rejected.
The broker did not comply with the contract terms because a floating interest rate is not equivalent to a fixed 10% interest rate. The broker's proffer of the nonconforming A.I.B. loan commitment constituted a counteroffer that rejected the original contract terms, which the borrowers properly rejected. Accordingly, the broker is not entitled to recover a brokerage fee.
[1] A mortgage broker's offer of a loan commitment with a floating interest rate does not comply with a contract requiring a fixed interest rate.
[2] A mortgage broker is not entitled to a fee when the loan commitment offered does not mirror the terms of the parties' agreement.
Previewing 2 of 3 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“A floating interest rate is not a 10% interest rate, and is subject to increase up until the closing date.”
Establishes that the broker's loan commitment with a floating rate did not satisfy the contract requirement for a fixed 10% rate.
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Join FLexlaw to unlock all legal intelligenceThe Padrón borrowers signed a mortgage broker agreement with Carlos Plantada to procure a loan commitment of $584,000 at a fixed 10% interest rate for…
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LEVY, Judge.
In this appeal involving a broker’s cause of action for breach of a borrower-mortgage broker agreement, we reverse the final judgment entered in favor of the broker, based upon our finding that the borrowers properly rejected the broker’s nonconforming loan commitment counteroffer. Appellants Francisco L. Padrón and Joanne E. Padrón [hereafter the “borrowers”], contacted appellee/broker Carlos Plan-tada [hereafter the “broker”], and signed a mortgage broker’s agreement, whereby they agreed to pay the broker $17,520 to procure a loan commitment by July 26, 1991, for the sum of $584,000, at a fixed interest rate of 10%, for 30 years.
Thereafter, the broker procured a loan commitment from A.I.B. Mortgage Company for the sum of $584,000, at a floating rate for 30 years. The borrowers told the broker that they would accept a loan commitment which mirrored the terms of the brokerage agreement, however they would not accept the A.I.B. loan commitment because they were unsure what the actual interest rate would be under the floating rate. In early July of 1991, the borrowers informed the broker that they were able to obtain a loan from another lender for $595,200 at an 8% variable interest rate. The borrowers closed in August of 1991, using the other lender. The broker brought suit alleging that he had complied with the terms of the contract, and that the borrowers had terminated the contract while the broker still had time remaining in which to perform. Final judgment was entered in favor of the broker for $13,389.00, which was the amount of the contract fee, minus the cost of locking in a 9.75% rate on the loan on July 9, 1991, for 45 days.
The trial court denied the broker’s request for attorney’s fees and prejudgment interest. The borrowers then brought this appeal from the adverse final judgment, and the broker cross-appealed the denial of his request for prejudgment interest and attorney’s fees.
The trial court erred in finding that the broker had complied with the terms of the contract, and in finding that the borrowers were in breach. The broker offered a loan commitment from A.I.B. Mortgage Company which did not reflect the terms of the contract requiring a fixed rate of 10% for thirty years, for the sum of $584,000. A floating interest rate is not a 10% interest rate, and is subject to increase up until the closing date. The proffer of the A.I.B. loan commitment at an unspecified floating rate did not mirror the terms of the parties’ agreement and thus constituted a counteroffer, which rejected the original contract terms. See U.S. Drug Discount Corp. v. Fried-Lackey Realty Co., 483 So. 2d 459 (Fla. 3d DCA 1986); Mintzberg v. Golestaneh, 390 So. 2d 759 (Fla. 3d DCA 1980).
Because the broker failed to procure a loan commitment which complied with the terms of the agreement, the broker is not entitled to recover a brokerage fee. See McAllister Hotel, Inc. v. Porte, 98 So. 2d 781 (Fla.1957); Sheldon Greene & Associates, Inc. v. Williams Island Associates, 571 So. 2d 549 (Fla. 3d DCA 1990); Harding Realty, Inc. v. Tumberry Towers Corp., 436 So. 2d 983 (Fla. 3d DCA 1983); Bryan & Greenlees Real Estate, Inc. v. Norman, 405 So. 2d 181 (Fla. 4th DCA 1981).
Accordingly, we reverse the final judgment entered in favor of the broker. In view of our resolution on the breach of contract issue, the broker’s remaining points on the cross-appeal become moot, and need not be addressed.
Reversed.
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Giovo v. McDONALD, 791 So. 2d 38 (Fla. 2d DCA 2001)…cal to nor did it assent to the definite propositions contained in Giovo’s offer. As such, it was a counteroffer which operated as a rejection of Giovo’s offer and which Giovo was not obligated to accept. Ribich, 784 So. 2d 1201; Padron v. Plantada, 632 So. 2d 113 (Fla. 3d DCA 1994). Based on the undisputed facts of record the circuit court should have denied the McDonalds’ motion for summary judgment on their settlement defense and should have granted Giovo’s motion. Reversed and remanded for further procee…
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Inger Press and Lisa Sanders v. Jordan, 670 So. 2d 1016 (Fla. 3d DCA 1996)…id not subsequently consent to the modification. This modification was a “material variation of the agreement, so as to be no more than a counter-offer.” Binninger v. Hutchinson, 355 So. 2d 863, 865 (Fla. 1st DCA 1978); see also, Padron v. Plantada, 632 So. 2d 113 (Fla. 3d DCA), review denied, 639 So. 2d 980 (Fla.1994) (“an unspecified floating [interest] rate did not mirror the terms of the parties’ agreement and thus constituted a counteroffer, which rejected the original contract terms”); Zepfler v. Neandr…
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Ribich v. Evergreen Sales & Serv., Inc., 784 So. 2d 1201 (Fla. 2d DCA 2001)…in the mode, at the place and within the time expressly or impliedly required by the offer. Sullivan v. Econ. Research Props., 455 So. 2d 630, 631 (Fla. 5th DCA 1984). A counteroffer operates as a rejection of a preceding offer. Padron v. Plantada, 632 So. 2d 113 (Fla. 3d DCA 1994). In this case the circuit court ruled that the Ribiches’ counteroffer to accept [*1203] the liability limits without executing the no-lien affidavit remained outstanding on February 22, -when Hartford accepted it by delivering th…
Previewing 3 of 6 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- McALLISTER Hotel, Inc. v. Porte, 98 So. 2d 781 (Fla. 1957)
- Harding Realty, Inc. v. Turnberry Towers Corp., 436 So. 2d 983 (Fla. 3d DCA 1983)
- Kartee v. Manchero, 390 So. 2d 759 (Fla. 3d DCA 1980)
- McMILLAN v. Spence H. Pass and Elizabeth A. Pass, 483 So. 2d 459 (Fla. 3d DCA 1986)
- Bryan & Greenlees Real Est., Inc. v. Norman, 405 So. 2d 181 (Fla. 4th DCA 1981)
- Sheldon Greene & Assocs., Inc. v. Williams Island Assocs., 571 So. 2d 549 (Fla. 3d DCA 1990)