VALERI IVANOV, ET AL., APPELLANTS,
v.
STUART SOBEL, ET AL., APPELLEES
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Russian buyers entered into a contract to purchase a home for $300,000 with a $30,000 earnest money deposit. A real estate agent convinced them to form a Florida corporation and gave her check-signing authority, but she absconded with the closing funds, causing default. The court held that the innocent sellers could properly retain the earnest money as liquidated damages despite the buyer's loss being caused by the agent's criminal conduct.
The court held that innocent sellers are not responsible for the intentional wrongful acts of a real estate agent and may retain the earnest money deposit as liquidated damages when the buyers default, even if the default was caused by the agent's criminal conduct. The $30,000 deposit (10% of the purchase price) was a reasonable liquidated damages provision, not an unenforceable penalty.
[1] Sellers are not responsible for the intentional wrongful act of a real estate agent who absconded with the buyer's funds, especially when the sellers could not anticipate…
[2] A liquidated damages clause in a real estate contract is enforceable when the deposit amount is not grossly disproportionate to the damages the sellers might reasonably e…
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Join FLexlaw to unlock all legal intelligence“We agree with the trial court that the Sobéis, as innocent sellers, are not responsible for the intentional wrongful act of the real estate agent who absconded with the buyer's funds.”
Establishes that innocent sellers bear no liability for an agent's criminal conduct separate from the buyer's default.
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Join FLexlaw to unlock all legal intelligenceThe Ivanovs, Russian nationals, agreed to purchase the Sobéis' home for $300,000 with a $30,000 earnest money deposit held in the broker's trust accou…
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PER CURIAM.
The Ivanovs, Russian nationals, entered into negotiations to purchase the Sobéis’ home for $300,000. A $30,000 earnest money binder was placed in the trust account of Kotler Realty, Inc., the procuring broker. The transaction, in substantial part, had been negotiated through the efforts of one of the broker’s salespersons, Taisia Buliak, because she spoke fluent Russian.
To facilitate the closing without the Iva-novs having to be present, Mrs. Buliak suggested they form a Florida corporation and place the cash necessary to close in a corporate account and give her authority to draw checks against it. The Ivanovs followed Ms. Buliak’s advice, created the corporate account and transferred into the account the remainder of the funds necessary to close the house purchase. Only days before the date set for the closing, Buliak absconded with all the closing money, which caused a collapse of the transaction and a default.
Subsequently, the corporate broker, Kotler Realty, disbursed the $30,000 earnest money binder from its trust account directly to the Sobéis based on the Ivanovs’ default. The Ivanovs then filed this complaint against the corporate broker, and the errant salesperson, as well as the Sobéis, as sellers. The Iva-novs’ causes of action against the Sobéis were for specific performance and restitution. The Sobéis ultimately moved for and procured a favorable summary final judgment validating the disbursement of the trust account to them as liquidated damages. The Ivanovs have appealed claiming that the So-béis were unjustly enriched by the disbursement of the earnest money deposit.
We agree with the trial court that the Sobéis, as innocent sellers, are not responsible for the intentional wrongful act of the real estate agent who absconded with the buyer’s funds. They could not anticipate the criminal event. The theft did not further the Sobéls’ interests, as sellers. Perez v. Zazo, 498 So .2d 463 (Fla. 3d DCA 1986); Kirschenbaum v. Rehfield, 539 So. 2d 12 (Fla. 3d DCA 1989); cf. Trumbull v. Seawright, 134 So. 2d 829 (Fla. 1st DCA 1961) (where one of two innocent persons must suffer from the wrongful act of a third, the person who made the wrongful act possible must bear the loss), cert. denied, 143 So. 2d 491 (Fla.1962). Here, the salesperson’s criminal conduct caused the Sobéis the loss of the sale, and the Sobéis are entitled to rely on the liquidated damages clause as a result of the Ivanovs’ consequential default. See Lefemine v. Baron, 573 So. 2d 326 (Fla.1991). Further, the default provision was in no way an unenforceable penalty upon the buyers. Id. The $30,000 deposit was ten percent of the purchase price, and was not grossly disproportionate to any damages that the Sobéis might reasonably expect to incur as a result of a default on a $300,000 dollar sale, and the Sobéis could have intended only to induce full performance through the deposit amount. Id.
Affirmed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Lefemine v. Baron, 573 So. 2d 326 (Fla. 1991)
- Perez v. Zazo, 498 So. 2d 463 (Fla. 3d DCA 1986)
- Trumbull Chevrolet Sales Co., Inc. v. Seawright, 134 So. 2d 829 (Fla. 1st DCA 1961)
- Kirschenbaum v. Roger Rehfield, Sam Bloom, Sam Bloom, P.A., 539 So. 2d 12 (Fla. 3d DCA 1989)
- Applebaum v. Applebaum, 143 So. 2d 491 (Fla. 1962)
- Smith v. State, 143 So. 2d 491 (Fla. 1962)