09-2444 PALM LAKE PARTNERS II, LLC, a Florida limited liability company and FALCON LAKE APARTMENTS, LLC, a Florida limited liability company, v. C & C POWERLINE, INC., a Florida corporation, PETER

SUPREME COURT CASES

Laws-info.com » Cases » Florida » Florida First District Court » 2010 » 09-2444 PALM LAKE PARTNERS II, LLC, a Florida limited liability company and FALCON LAKE APARTMENTS, LLC, a Florida limited liability company, v. C & C POWERLINE, INC., a Florida corporation, PETER

State: Florida

Court: Florida First District Court

Docket No: 09-2444

Case Date: 06/21/2010

Preview:IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND PALM LAKE PARTNERS II, DISPOSITION THEREOF IF FILED LLC, a Florida limited liability company and FALCON LAKE APARTMENTS, LLC., a Florida CASE NO. 1D09-2444 limited liability company, Appellants/Cross-Appellees, v. C & C POWERLINE, INC., a Florida corporation, PETER DEL COL, individually, JOHN M. MARCHI, individually, ROY B. SIMPSON, individually and CITY OF JACKSONVILLE, Appellees/Cross-Appellants. _____________________________/ Opinion filed June 21, 2010. An appeal from the Circuit Court for Duval County. Bernard Nachman, Judge. George M. McClure and Susan S. Bloodworth of McClure Bloodworth, P.L., St. Augustine, for Appellants/Cross-Appellees. John R. Stiefel, Jr. of Holbrook, Akel, Cold, Stiefel & Ray, P.A., Jacksonville, for C & C Powerline, Inc.; James W. Middleton, A. Graham Allen and Cristine M. Russell of Rogers Towers, P.A., Jacksonville for Peter Del Col, John Marchi & Roy Simpson; and Richard A. Mullaney, General Counsel and Dylan T. Reingold, Assistant General Counsel, Jacksonville, for City of Jacksonville.

BENTON, J. Palm Lake Partners, II, LLC (Palm Lake) and Falcon Lake Apartments, LLC (Falcon Lake) appeal the judgment entered against them in an action C and C Powerline, Inc. (C&C) brought claiming (as a purported third-party beneficiary) breach of Palm Lakes contract to purchase real property (Purchase Agreement) from Peter Del Col, John Marchi, and Roy Simpson (Sellers). Sellers (who

originally intervened as plaintiffs below, but were subsequently named as defendants in C&Cs amended complaint, and then crossclaimed) cross appeal (against Palm Lake and Falcon Lake) the denial of the full extent of the award of specific performance they sought--the road the trial court ordered built would not adequately accommodate all utilities, they claim--and (against the City) denial of their claim for declaratory relief. On the main appeal, we reverse the judgment requiring Palm Lake and Falcon Lake to build a road--which also disposes of the specific performance prong of Sellers cross-appeal--but remand with directions that the trial court award Sellers liquidated damages as specified in the easement and road construction agreement between Sellers and Palm Lake. On the cross-appeal

otherwise, we affirm: The City argues persuasively that Sellers are not entitled to bypass administrative remedies in order to pursue judicial remedies, even 2

declaratory judgment. For whatever reason, C&C never stated a claim against Sellers below and seeks no relief against Sellers here. I. Sellers owned a 55-acre parcel in Jacksonville that Palm Lake Drive bisects, as well as a strip of property abutting the 55-acre parcel to the north. C&C operates a business on 30 acres still farther north, and relies on Palm Lake Drive for access to its own property. When C&Cs owner, Chuck Chitty, learned a comprehensive plan amendment--to change the land use designation of Sellers parcel from industrial to residential--was under consideration, he spoke to Sellers representative, Barry Hurtz. Mr. Chitty was concerned that new residents might complain about truck traffic. Eventually, Messrs. Chitty and Hurtz verbally agreed that C&C would not, in exchange for construction of an alternate access road to C&Cs property, object to any comprehensive plan amendment reclassifying Sellers property as residential. On May 1, 2005, Sellers and Palm Lake signed the Purchase Agreement, which (wholly unbeknownst to C&C at the time) provided: "The parties acknowledge that it will be necessary to build an access road from a city street north of the property across adjacent property that the Seller owns to Main Street (,,Access Road). The purpose of the Access Road is to provide alternative ingress and egress to adjacent property owners to the north of the Property. The Access 3

Road will be constructed by Buyer pursuant to the terms and conditions as set forth in Paragraph 11 herein." Paragraph 11 of the agreement provided, in part: Access Road: The parties acknowledge that it is necessary to construct an Access Road at the northern boundary of the site to provide alternate access for property owners located north of the Property. Buyer agrees to construct the Access Road pursuant to plans and specifications approved by the parties. . . . Seller shall pay for one half the cost of the Access Road but no more than Three Hundred Fifty Thousand Dollars ($350,000.00). Sellers portion of the cost of th e Access Road shall be deducted from Purchase Price. Buyer shall pay for the balance of the cost of the Access Road. In the event the Final Bids exceed[] $900,000, Buyer has the right to terminate this Agreement and receive a return of its deposit. Buyer agrees to bond off and commence construction of the Access Road prior to occupancy of any units on the Property. Anticipating construction of apartments on the parcel, an application was filed with the City of Jacksonville (City) for a Planned Unit Development (PUD), and, on August 23, 2005, the City enacted Ordinance 2005-740-E, which rezoned the parcel as a PUD, "subject to the written description dated August 11, 2005."1 The rezoning was also explicitly subject to the following condition: "The development shall proceed in accordance with the Traffic Engineering Memorandum dated

The written description provides: "A new road will be constructed to provide direct access to the industrial parcels to the north of the subject property. This new road, linking Main Street to Noah Road, will serve to provide a bypass and eliminate cut-through traffic within the residential development. . . . The new access road to the northern parcels should be designed and under construction prior to the occupancy of the first dwelling unit." 4

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August 4, 2005 and attached hereto as Exhibit 4, or as otherwise approved by the Traffic Engineering Division and the Planning and Development Department."2 As it had promised, C&C did not object to the rezoning that Ordinance 2005-740-E effected. On February 28, 2006, before access road plans and specifications--much less construction permits or any contract--had been approved, Sellers conveyed the parcel to Palm Lake on the terms set out in the Purchase Agreement as amended by a written grant of easement for a future access road (the easement and road construction agreement), which provided: "Grantee agrees as partial consideration for the grant of this easement by Grantor to bond off and commence construction of the Future Access Road no later than February 28, 2009 and prior to occupancy of any units on the Grantees Parcel. If Grantee fails to commence construction by February 28, 2009, Grantee shall pay to Grantor Three Hundred Fifty Thousand and no/100 Dollars ($350,000.00) and shall be released from the obligation to construct the Future Access Road."3

In this memorandum, the Traffic Engineering Division had the following comment after review of the PUD application: "Noah Road shall be terminated in a cul-de-sac prior to Main Street." The comment reflected the Divisions conclusion that an access road would conflict with the limited access right-of-way for an on-ramp to State Road 9A. The supposed conflict later proved to be a misunderstanding about the location of the proposed road. 3 Palm Lake then entered into a partial assignment and assumption of agreement with Falcon Lake in which Palm Lake assigned and Falcon Lake assumed Palm Lakes contractual obligation to construct the access road. 5

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II. Only after closing did the developers (Palm Lake and Falcon Lake) obtain engineering plans for the access road and FDOT approve a connection to Main Street. Soon thereafter, however, it became apparent that a portion of the access road was proposed to run along a section of Noah Road4 on ground that guy wires steadying Jacksonville Electric Authority (JEA) power lines already occupied. JEA advised all concerned that relocating the guy wires would cost some $800,000, and would take a long time to engineer, and that guy wires might soon be unnecessary altogether because of changes JEA contemplated making in the power grid system. In February of 2007, the developers discussed with a city councilman the PUD condition requiring construction of an access road as an alternative to Palm Lake Drive. After a later meeting between the developers and certain City

officials, the City officials construed the PUD condition as not only not requiring the developers to construct the access road but as not permitting them to do so, either, and a memorandum was placed in the Palm Lake PUD file to the effect that construction of the access road would violate Ordinance 2005-740-E. Palm Lake and Falcon Lake subsequently informed the Sellers and C&C--which learned only

Sellers and C&C contemplated that the access road would lie perpendicular to Palm Lake Drive within the platted but unopened Noah Road right of way, then traverse commercial property the Sellers retained, ending at North Main Street. 6

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in February of 2007 that Sellers had sold the parcel--that the access road would not be constructed. III. Apprised of the situation, C&C filed the complaint that began the proceedings below, asserting doubt as to its rights under the ordinance and requesting declaratory judgment. C&C also alleged that it was a third-party

beneficiary of the Purchase Agreement between Sellers and Palm Lake, and that Palm Lake had breached the agreement. C&C sought temporary and permanent injunctive relief, including a ban on leasing residential units until an access road was constructed.5 Sellers, who had initially intervened as parties plaintiff, filed cross-claims against Palm Lake, Falcon Lake and the City, after C&C named them as defendants in an amended complaint. Sellers also sought a declaration of their rights under the ordinance as to the City; and under the Purchase Agreement (as modified by the easement and road construction agreement) regarding Palm Lakes and Falcon Lakes asserted duty either to build the access road or to return $350,000 to Sellers and to relinquish the easement Sellers had conveyed for construction of an access road.

The trial court never granted this relief. The initial certificates of occupancy for the apartment units were issued in February of 2008. The record is devoid of any indication apartment residents have complained about truck traffic. 7

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Eventually, the trial court granted partial summary judgment, ruling that C&C was a third-party beneficiary of the Purchase Agreements access road provisions. In a supplemental order, the trial court set out its rationale: that, by not opposing the rezoning, C&C had materially changed its position in justifiable reliance on Sellers promise to construct an access road and that C&Cs justifiable reliance precluded any purported modification of the Purchase Agreement that would permit the access road to go unbuilt. On this basis,6 the trial court

concluded that the subsequent easement and road construction agreement was ineffective because Sellers and Palm Lake had entered into it without C&Cs consent. In its final judgment, the trial court ruled that damages would not afford C&C an adequate remedy for the failure to build an access road (providing an alternative to Palm Lake Drive), and that the equitable remedy of specific performance was appropriate. IV.

The trial court also reasoned that the $350,000 which was to be paid to Sellers under the terms of the easement and road construction agreement if Palm Lake did not "commence construction by February 28, 2009," was "simply the return of the balance of the purchase price which had been previously credited"; that, in essence, Palm Lake "simply retained the right to perform or not to perform as they chose," rendering the easement and road construction agreement an illusory contract binding neither side. No party argued this theory below and we reject it. As a factual matter, there was no return of any purchase price or portion thereof. As a legal matter, the easement and road construction agreement simply incorporated a liquidated damages provision. 8

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On factual findings the parties do not dispute, we review the learned trial judges interpretation of the contract documents de novo. "The trial courts

interpretation of the contract is a matter of law subject to a de novo standard of review." Imagine Ins. Co. v. State ex rel. Dept of Fin. Servs., 999 So. 2d 693, 696 (Fla. 1st DCA 2008) (quoting Jenkins v. Eckerd Corp., 913 So. 2d 43, 49 (Fla. 1st DCA 2005)). Moreover, "a contract which is clear, complete, and unambiguous does not require judicial construction," id. (quoting Jenkins, 913 So. 2d at 50) and, "if the facts of the case are not in dispute, the court will also be able to resolve the ambiguity as a matter of law." Id. (quoting Strama v. Union Fid. Life Ins. Co.,793 So. 2d 1129, 1132 (Fla. 1st DCA 2001)). V. The trial court erred in concluding that the Purchase Agreement, which provided that it "may be amended . . . by written instrument executed by both parties," created an immutable obligation on Palm Lakes part to construct an access road for the benefit of C&C. Sellers promised C&C an alternative access road without specifying who would finance or build the road, and without indicating that anyone other than Sellers themselves would be responsible for construction of the road. A "promisor and a promisee can by agreement create a duty to a beneficiary which cannot be varied without his consent. But in the absence of such an agreement the parties retain control over the contractual 9

relation they have created." RESTATEMENT (SECOND) OF CONTRACTS

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