2D06-5675 / Mastec, Inc. v. TJS, LLC.

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State: Florida

Court: Florida Southern District Court

Docket No: 2D06-5675

Case Date: 02/27/2008

Plaintiff: 2D06-5675 / Mastec, Inc.

Defendant: TJS, LLC.

Preview:NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
MASTEC, INC.,                                                                           )
)
Appellant,                                                                              )
)
v.                                                                                      )   Case No. 2D06-5675
)
TJS, LLC, and LAKELAND GRANITE                                                          )
AND MARBLE, INC.,                                                                       )
)
Appellees.                                                                              )
)
Opinion filed February 27, 2008.
Appeal from the Circuit Court for Polk
County; James Michael Hunter, Judge.
Erik W. Scharf of Erik W. Scharf, P.A.,
Coconut Creek, for Appellant.
Monterey Campbell, Mark N. Miller, and
Kristie Hatcher-Bolin of GrayRobinson,
P.A., Lakeland, for Appellees.
WALLACE, Judge.
MasTec, Inc. (the Seller) appeals a final judgment for the specific
performance of a contract for the sale of a reclaimed phosphate mine to TJS, LLC, and
Lakeland Granite and Marble, Inc. (collectively, the Buyers).   The Buyers failed to

tender the purchase price to the Seller before the contract expired, and a tender in
accordance with the contract was not excused.   For this reason, we reverse the final
judgment for specific performance.
The Facts
On March 5, 2003, the Seller entered into a "Vacant Land Contract" (the
Contract) with Lakeland Granite and Marble, Inc.1   The Contract was for the sale of
approximately 475 acres located on State Road 540 in Polk County.   The purchase
price was $475,000 or $1000 per acre as shown by a survey that was to be prepared
before closing.   The closing agent held a $10,000 deposit, and the balance of the
purchase price was payable at closing.   With respect to the closing date, the Contract
provided, in pertinent part: "This Contract will be closed and the deed and possession
delivered on or before July 25, 2003, unless extended by other provisions of this
Contract."
Later, Lakeland Granite made a partial assignment of the Contract to TJS,
LLC.   In accordance with the assignment, TJS was to take title to 353 acres of the
property at closing, and Lakeland Granite would take title to 125 acres.2   The Seller
eventually approved the assignment.
Several provisions of the Contract are noteworthy.   The Contract provided
that time was of the essence for all of its provisions.3   Under paragraph 5(c) of the
1    The Contract was on a preprinted form issued by the Florida Association of
Realtors.   The form bears the designation "VAC-6 10/00."
2    After the execution of the Contract, a survey disclosed that the property
included 478 acres.
3    The "time is of the essence" provision appears in bold print.
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Contract, the Seller agreed to provide the Buyers with a title insurance commitment as
title evidence.   The title insurance commitment was required to conform to the
requirements of paragraph 8(a) of the Contract.   With respect to title examination,
objections to title defects, and cure, paragraph 8(b) of the Contract provided as follows:
(b)   Title Examination:   Buyer will examine the title
evidence and deliver written notice to Seller, within 5 days
from receipt of title evidence but no later than closing, of any
defects that make the title unmarketable.   Seller will have 30
days from receipt of Buyer's notice of defects ("Curative
Period") to cure the defects at Seller's expense.   If Seller
cures the defects within the Curative Period, Seller will
deliver written notice to Buyer and the parties will close the
transaction on Closing Date or within 10 days from Buyer's
receipt of Seller's notice if Closing Date has passed.   If
Seller is unable to cure the defects within the Curative
Period, Seller will deliver written notice to Buyer and Buyer
will, within 10 days from receipt of Seller's notice, either
cancel this Contract or accept title with existing defects and
close the transaction.
Such provisions for a buyer's written notice of title defects and a seller's opportunity to
cure are common features of real estate contracts in Florida.   See, e.g., Jones v.
Warmack, 967 So. 2d 400, 401-02 (Fla. 1st DCA 2007) (interpreting a similar contract
provision); see also J. Richard Harris & Kevin M. Rys, Basic Agreement, in Florida Real
Property Sales Transactions §§ 3.32-.33, .36 (Fla. Bar CLE 4th ed. 2004) (discussing
the delivery of title evidence to the buyer, the buyer's notice of defects, the seller's
opportunity to cure defects, and providing a contract form provision).   The Contract
provides further that it constitutes the entire agreement between the parties and that
"[m]odifications of this Contract will not be binding unless in writing, signed and
delivered by the party to be bound."
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The property had previously been used as a phosphate strip-mine.   After
the Seller acquired the property in 1996, it undertook reclamation efforts.   The
reclamation process was substantially completed when the parties entered into the
contract.   However, the property was subject to two mortgages in favor of the Trustees
of the Internal Improvement Fund (the TIIF mortgages).   The TIIF mortgages had been
recorded by the Florida Department of Environmental Protection (DEP) as security for
the completion of the reclamation process.
Lakeland Granite selected a local attorney, Stephen H. Artman, to act as
the closing agent and title agent for the transaction.   As closing agent, Mr. Artman held
the Buyers' $10,000 deposit in his trust account.   Mr. Artman did not have an attorney-
client relationship with either the Buyers or the Seller.   In fact, each of the Buyers was
represented by local counsel.   Lakeland Granite was represented by Richard A. Miller.
TJS was represented by Christopher M. Fear, but Mr. Fear was authorized to act on
behalf of both TJS and Lakeland Granite.   House counsel handled matters pertaining to
the Contract for the Seller.
Shortly before the July 25, 2003, closing date designated in the Contract,
Mr. Artman obtained a title search report for the property.4   In addition to the TIIF
mortgages, the title search report reflected an easement in favor of Polk County, certain
reservations, and a long-term ground lease.   Mr. Artman faxed a copy of the title search
4    The title search report named the Seller as the apparent owner of the property
and listed the TIIF mortgages and other matters affecting the title to the property.
However, the title search report was prepared for Mr. Artman's use in evaluating and
determining the insurability of the title to the property prior to the issuance of title
insurance.   Thus the title search report was only preliminary information; it was not the
title commitment that the Seller was required to furnish to the Buyers under paragraphs
5(c) and 8(a) of the Contract.
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report to Mr. Fear on July 24.   Afterward, in July and August, Mr. Fear and Mr. Miller
informed Mr. Artman of their objections to several of the encumbrances on the property,
including the TIIF mortgages.   The trial court found that Mr. Artman had "communicated
these objections to [the Seller], either orally or by facsimile copy."
On July 26, 2003, the Seller and Lakeland Granite executed an addendum
to the Contract.   This first addendum extended the Contract and the closing date for
thirty days and rescheduled the closing for on or before August 25, 2003.   After the
execution of this first addendum, the parties realized that addressing the title issues—
especially obtaining releases of the TIIF mortgages—would take substantially longer
than they had originally anticipated.   Thus the parties executed a second addendum to
the Contract providing for a further extension.   The second addendum was dated
September 15, 2003.   The provisions of the second addendum would become a focus
of the litigation that ensued between the Seller and the Buyers.
The second addendum to the Contract was relatively brief.   It provided as
follows:
1.   All Parties have been advised that a title search
and examination has revealed discrepancies and
encumbrances which currently render Seller's title to the
subject property unmarketable.
2.   All Parties have been advised that additional time
will be required in order to obtain corrective instruments
necessary to correct the title problems.   Accordingly, both
Parties agree as follows:
A.   All Parties acknowledge and reaffirm that they
still intend to be bound by the Contract for Sale and
Purchase dated March 5, 2003 (hereinafter the "Contract").
B.   All Parties agree that the Contract shall be
extended for five (5) additional successive periods of thirty
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(30) days each.   During this time, the Contract shall auto-
matically renew every thirty (30) days until such time as it is
closed or a maximum period of 150 days has elapsed.
3.   All other terms and conditions of the Contract
remain unchanged.
Thus the second addendum extended the Contract for five additional successive
periods of thirty days each, effectively extending the expiration date of the Contract to
February 15, 2004.5
Mr. Artman sent the title commitment to the Buyers on September 11,
2003.6   Shortly thereafter, the parties executed the second addendum.   The recitals in
the second addendum reflected at least a general awareness by all parties that "a title
search and examination has revealed discrepancies and encumbrances which currently
render Seller's title to the subject property unmarketable."   Notably, after their receipt of
the title commitment, neither Mr. Fear nor Mr. Miller ever sent the Seller a written notice
outlining the defects that they claimed rendered the title unmarketable.   Likewise, the
Seller never sent written notice to the Buyers or their attorneys of its inability to cure any
of the "discrepancies and encumbrances" that the Buyers deemed objectionable.
Meanwhile, efforts to cure the title defects—particularly obtaining releases
of the TIIF mortgages—continued.   Most of this work was done by Mr. Fear.   By
5    In fact, a 150-day extension would have extended the Contract to February
12, 2004, not February 15.   Moreover, February 15, 2004, fell on a Sunday.   Under the
Contract, for any deadline falling on a Saturday, Sunday, or national legal holiday,
performance would have been due on the next business day.   However, the parties and
the trial court treated the Contract as if it had been extended to February 15, 2004.   For
the purposes of our analysis, this discrepancy of three or four days is not material.
Therefore, we will use February 15, 2004, as the expiration date of the Contract fixed in
the second addendum.
6    The title commitment—unlike the title search report—was the evidence of title
that the Seller was contractually obligated to provide to the Buyers.
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December 2003, Mr. Fear anticipated that it would take several more months to obtain
the releases of the TIIF mortgages from DEP.   Thus, on December 17, 2003, Mr. Fear
wrote to Mr. Artman and proposed that clearing up matters pertaining to the TIIF
mortgages would be the Seller's postclosing obligation, "with the Seller and Buyer
entering into an Escrow Agreement with an escrow of $100,000 to secure the Seller's
performance of the obligation."   In addition, Mr. Fear proposed an amendment to the
Contract to extend the closing date to March 15, 2004.   The Seller never agreed to this
proposal.
On January 5, 2004, Mr. Artman sent the Seller a proposed addendum to
the Contract that would have extended it for five additional successive periods of thirty
days each.   Mr. Artman explained in his letter that "the [B]uyers are requesting
additional time in which to complete" the ongoing efforts to secure the approval and
permitting from the Southwest Florida Water Management District.   Such approval and
permitting was a prerequisite to obtaining releases of the TIIF mortgages.   The Seller
did not agree to this proposal.
On February 15, 2004, the drop-dead date fixed in the second addendum
expired without either party taking steps to close the Contract.   Nevertheless, on March
5, 2004, Derrell Riley, one of the Seller's representatives, wrote to Mr. Artman in
response to his letter of January 5, 2004.   In pertinent part, Mr. Riley's letter said:
[The Seller] will grant an extension of sixty (60) business
days only commencing March 8th, 2004[,] and ending May
28th, 2004.   If this transaction is not closed by the end of the
extension term allotted, the original Contract for Sale and
Purchase and previous bid will be null and void.
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If your client7 is in agreement, please prepare a
simple 60[-]day extension and send it to me for signatures.
On March 8, 2004, Mr. Artman responded by sending Mr. Riley a proposed third
addendum to the Contract providing for an additional extension.   The Seller found some
of the details of this proposal to be objectionable.   The trial court subsequently found
that the exchange of proposals between Mr. Riley and Mr. Artman did not constitute an
agreement to extend the closing date beyond February 15, 2004.
On March 12, 2004, Mr. Fear sent Mr. Riley a letter with yet another
proposed amendment to the Contract.   Mr. Fear's proposal called for a closing date no
later than May 11, 2004, and imposed various postclosing obligations on the Seller.   In
addition, the proposal provided that the Seller would place $100,000 from the closing
proceeds in escrow as security for the performance of its postclosing obligations.   On
April 9, 2004, the Seller wrote Mr. Fear acknowledging "receipt of your letter dated
March 12, 2004[,] enclosing a proposed Second Amendment to that Contract dated
March 1, 2003."8   The Seller's letter continued, "Your counteroffer is rejected."
The Buyers subsequently dropped their demand for the $100,000 escrow
requirement, and they notified the Seller that they were ready, willing, and able to
proceed with the closing.   However, at that point, the Seller was not willing to close the
transaction.   These events set the stage for the lawsuit that followed.
7    The reference in Mr. Riley's letter to "your client" reflects a misunderstanding
of Mr. Artman's role.   As noted above, Mr. Artman was selected to serve as the closing
agent and title agent for the transaction.   He was not the attorney for any of the parties.
8    If the parties had executed this document, it would have constituted the third
amendment or addendum to the Contract, not the second.
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The Proceedings in the Trial Court
On May 20, 2004, the Buyers filed a complaint seeking both damages and
specific performance against the Seller.9   At a bench trial conducted approximately two
years after the Buyers had filed suit, the focus of the parties' presentations was on
whether the Contract had been extended beyond the drop-dead date of February 15,
2004, that had been fixed in the second addendum.   For example, the Buyers' trial
memorandum advised the trial court that "[t]he over-arching issue in this case is
whether the Contract had expired on or before April 9, 2004[,] when [the Seller]
terminated its performance."   The Buyers argued that the March 5, 2004, letter written
by Derrell Riley of the Seller to Mr. Artman and Mr. Artman's March 8, 2004, reply
amounted to an agreement to extend the closing date for sixty business days
commencing March 8, 2004, and ending May 28, 2004.   In response, the Seller
contended that this exchange of correspondence did not constitute yet another
agreement to extend the closing date.   In the Seller's view, Mr. Artman's reply was not
an acceptance of the Seller's request for a "simple 60[-]day extension."   Instead, the
Seller argued that Mr. Artman's proposed Third Addendum to the Contract providing for
an additional extension was a counteroffer that added additional terms.   The Seller
asserted that it had rejected this "counteroffer."
9    At the conclusion of the trial, the Buyers elected the remedy of specific
performance.
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After hearing the evidence and arguments, the trial court had a different
perspective on the legal issues determining the outcome of the case.10   The trial court
agreed with the Seller's contention that there had been no agreement to extend the
closing date beyond February 15, 2004.   Despite this finding, the trial court decided that
the Seller had breached the Contract and was obligated to perform.   The trial court's
decision was based on two legal conclusions.   First, the trial court interpreted the
second addendum to the Contract as relieving the Buyers of their contractual duty to
provide written notice of title defects upon receipt of the title commitment.   In the trial
court's view, the second addendum amounted to an acknowledgment that all parties
were aware of the title defects that required correction, and it triggered the Seller's duty
either to cure the defects or to provide written notice of its inability to cure.   Second, the
trial court considered the Seller's omission to send notice of its inability to cure the title
defects as obligating it to convey marketable title to the Buyers on the drop-dead date of
February 15, 2004.   Under the trial court's analysis, when the transaction failed to close
on that date, the Seller was in breach of the Contract.
The trial court's two critical rulings appear in the following portions of the
final judgment:
8.   The [second a]ddendum constitutes an
acknowledgment by the parties [that] there were title defects
rendering title unmarketable and that additional time was
required to cure those defects.   The [second] addendum also
constituted an amendment to the Contract which made
unnecessary, or eliminated, the contractual requirement that
the Buyer[s] provide the Seller with written notice of any
10    On announcing his ruling orally, the trial judge said: "But, here's the point that
I'm surprised neither one of you tried to argue with me at all.   And nobody seemed to—
and who knows maybe because I'm looking at this thing differently."
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defects that made title unmarketable.   The parties were
aware of the title defects which rendered title unmarketable.
10.   On January 5, 2004, [Mr.] Artman corresponded
with [the Seller] and, in addition to generally summarizing
activities undertaken by the Buyers to remedy title defects,
requested an extension of the closing date in order to obtain
additional time to cure title defects.   The [Seller] did not
respond to this request by the February 15, 2004[,] closing
date nor did it inform the Buyers, in writing, pursuant to
Paragraph 8(b) of the Contract, that it was unable to cure the
title defects.   The contract did not close on February 15,
2004.   Accordingly, the [Seller] was in breach of contract as
of that date.
Based on these conclusions of law, the trial court ruled that the Buyers were entitled to
specific performance of the Contract.11
Discussion
On appeal, the Seller's arguments address three different aspects of the
trial court's ruling: (1) the construction of the Contract, (2) the issues relating to
performance and breach, and (3) the appropriate remedy.   On the contract construction
issue, the Seller argues that the trial court erred in interpreting the second addendum's
recitals as amending the Contract so that the Buyers' obligation to give written notice of
title defects was eliminated, but the Seller's obligation to respond in writing was
retained.   With respect to the issues of performance and breach, the Seller contends
that the trial court erred in finding it to be in breach when the Buyers never tendered the
purchase money.   Finally, the Seller maintains that the Contract's default clause
precludes an award of specific performance when the Seller fails to make title
11    The trial court's final judgment contains detailed findings of fact and
conclusions of law.   These findings of fact and conclusions of law have facilitated this
court's review of this case.
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marketable.12   After a thorough review of all three issues, we conclude that we need
only discuss the issue relating to performance and breach of the Contract.
Whether or not the trial court's construction of the Contract was correct,
the issues relating to performance and breach are dispositive of this case.   Accordingly,
we may assume—without deciding—that the second addendum amended the Contract
so that the Buyers were not required to give the Seller written notice of title defects.
From this assumption, it follows that the Seller omitted to give the Buyers the requisite
notice of its inability to cure the title defects on or before February 15, 2004.   Even so,
the Buyers were not entitled to specific performance because they did not tender the
purchase price to the Seller before the Contract expired.
Based on the trial court's construction of the Contract, the Seller, having
failed to give the Buyers written notice of its inability to obtain releases of the TIIF
mortgages and to cure the other title defects, was obligated to convey marketable title to
the Buyers on or before February 15, 2004.   The trial court's remedy for the Seller's
failure to do so was to order the Seller to "take such action and execute and deliver
such documents . . . as may be reasonably necessary to facilitate the delivery of
marketable title at closing."   But the Contract called for concurrent performances by the
parties.   Thus the Seller could not be in breach of the Contract and obligated to convey
title absent a tender of payment by the Buyers.   Where, as here, the deed is to be
12    In pertinent part, the Contract's default clause provides:
Default: (a) Seller Default: If for any reason other than
failure of Seller to make Seller's title marketable after
diligent effort, Seller fails, refuses or neglects to perform this
Contract, Buyer may choose to receive a return of Buyer's
deposit without waiving the right to seek damages or to seek
specific performance as per Paragraph 16.
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delivered upon payment of the purchase price, " 'an actual tender and demand by one
party is absolutely necessary to put the other in default and to cut off his right to treat
the agreement as still subsisting.' "   Booth v. Bobbitt, 114 So. 513, 514 (Fla. 1927)
(quoting John N. Pomeroy, A Treatise on the Specific Performance of Contracts § 361
(John N. Pomeroy, Jr. & John C. Mann, eds., 3d ed. 1926)).
The trial court made no finding of tender, and the Buyers do not claim that
they made a tender of payment to the Seller on or before February 15, 2004.   In fact,
the closing agent never had more than the $10,000 deposit in his trust account.
Furthermore, the trial court did not find that a tender by the Buyers was excused by the
Seller's prior repudiation of the Contract, and such a finding would not have been
supported by the evidence.   Cf. Kaplan v. Laratte, 944 So. 2d 1074, 1075 (Fla. 4th DCA
2006) (finding that a buyer's duty to make deposits due under two real estate contracts
was excused where the seller repudiated the contracts when the buyer still had time to
make the deposits).   Here, the Contract provided—in bold print—that "[t]ime is of the
essence for all provisions of this Contract."   Consequently, in the absence of the Buyers'
tender of the purchase price on or before February 15, 2004, the Seller never became
obligated to convey title before the Contract expired.   See Vance v. Roberts, 118 So.
205, 208 (Fla. 1928); Robinson v. Abreu, 345 So. 2d 404, 405 (Fla. 2d DCA 1977);
Arvesu v. Blancom Props., N.V., 913 So. 2d 1231, 1232 (Fla. 3d DCA 2005); Garcia v.
Alfonso, 490 So. 2d 130, 131 (Fla. 3d DCA 1986); Hooper v. Breneman, 417 So. 2d
315, 317 (Fla. 5th DCA 1982); Emery v. Milton, 378 So. 2d 1300, 1301 (Fla. 3d DCA
1979).
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Conclusion
For these reasons, the trial court erred in ordering specific performance of
the Contract in favor of the Buyers.   We reverse the final judgment for specific
performance, and we remand for the entry of a final judgment in favor of the Seller.
Reversed and remanded with instructions.
KELLY and VILLANTI, JJ., Concur.
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