5D05-2393 Free v. Free

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State: Florida

Court: Florida Fifth District Court

Docket No: 5D05-2393

Case Date: 07/31/2006

Preview:IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT JULY TERM 2006

ROBERT C. FREE, Appellant, v. MARION FREE, F/K/A MARION MOORE, Appellee. ________________________________/ Opinion filed August 4, 2006 Appeal from the Circuit Court for Orange County, Cynthia Z. MacKinnon, Judge. Kenneth D. Morse, of Kenneth D. Morse, P.A., Orlando, for Appellant. August J. Stanton, III, of Stanton & Gasdick, Orlando, for Appellee. Case No. 5D05-2393

SAWAYA, J. The final judgment presented to us for review grants to Appellee, Marion Free, the equitable relief of specific performance of a "Contract for Sale and Purchase" and an attached "Land Contract" (collectively referred to as the contract). The judgment is

founded on three rulings by the trial court alleged to be erroneous by Appellant, Robert Free, who purchased the property subject to the contract: 1) the contract is valid and enforceable despite the lack of attestation by two witnesses; 2) Marion Free was not in default of the contract and was, therefore, not precluded from seeking specific

enforcement of its provisions; and 3) Robert Free was ordered to pay the closing costs associated with the conveyance of the real property despite provisions in the contract requiring that some of the costs be paid by Marion. We do not believe the first two rulings are erroneous, but conclude that it was error to require Robert to pay all of the closing costs in contravention of the express terms of the contract. In July 1996, Ron and Marion Free entered into a "Contract for Sale and Purchase" with Mr. and Mrs. Leibeck regarding property the Leibecks were offering for sale. The purchase price was $150,000, and the transaction concluded without the assistance of a real estate agent or broker. Attached to the contract was a handwritten agreement entitled "Land Contract," also signed by all parties, which required payments of $1,000 per month and set forth the following pertinent terms: $108,000.00 Note at 7% - $42,000.00 Existing Bank Note paid by Buyer. The final payment to be made on or before August 1, 1998 John & Janet Leibeck will occupy property until contract is paid in full with 90 days notice from buyer to vacate property. At that time good and marketable title and deed will be turned over. Buyer and Seller will split closing costs, and title insurance. Mobile dwelling will be turned over for a fee of $1.00 (one dollar). Land taxes to be paid by buyer. The signatures on the handwritten contract were notarized, but there were no witnesses. Ron and Marion moved onto the property and made improvements at a cost of approximately $30,000. They were occasionally unable to pay the full monthly amount to the Leibecks on time, but the Leibecks accepted the late payments without complaint.

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To accommodate Ron and Marion's financial situation, the Leibecks had extended the date for the final balloon payment twice. Ron and Marion were experiencing severe marital problems by early 2002. Three days after Marion had Ron arrested on domestic violence charges, Ron's father, Robert Free, discussed with Mr. Leibeck the possibility of purchasing the "note and mortgage," advising Mr. Leibeck that he was attempting to help Ron and Marion's marriage. Robert subsequently bought the property via a warranty deed executed by the Leibecks for the amount of $82,000, which was close to the existing balance owed by Ron and Marion. 1 Robert then offered to allow Ron and Marion to make 120 monthly payments of $1,000 each at 7% interest. Marion refused the offer and filed suit for specific performance of the contract previously entered into with the Leibecks. Robert answered the complaint, asserted affirmative defenses, and counterclaimed. Among his many contentions, Robert

asserted that the contract was unenforceable because it did not have the signatures of two witnesses required by section 689.01, Florida Statutes, and because the contract had been breached by Marion. Robert's counterclaim sought $24,625 for money he

The record clearly reveals that Robert had notice of the contract and purchased the property with that knowledge. He therefore acquired the property subject to the contract executed by Marion. See Harris v. Requa , 140 So. 911, 914 (Fla. 1932) ("The rule is well settled that `one purchasing property with notice that the grantor had contracted to convey it to another may be compelled to perform the contract in the same manner and to the same extent as his grantor would have been liable to do, had he not transferred the legal title.'") (quoting Drake v. Brady, 48 So. 978, 979 (Fla. 1909)); McDonald v. McGowan, 402 So. 2d 1197, 1200 (Fla. 5th DCA 1981) ("The law in this jurisdiction is well established that a person purchasing property with notice that the seller had contracted to convey it to another may be compelled to perform the contract in the same manner as the seller would have been required to do, had he not transferred the legal title."). 3

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had loaned to Marion, a writ of ejectment to remove Marion from the property, and to quiet his title claim. Following a trial, the trial court made extensive findings of fact and settled many issues of credibility against Robert. The court concluded that the original Land Contract had twice been extended and was not in default; that chapter 689, Florida Statutes, was inapplicable to the contract; and that even if the contract was in default, Robert was required to foreclose Marion's interest in the property. The court ordered Robert to transfer the property to Marion for $82,000 within thirty days and denied his claim for interest and closing costs. Regarding Robert's counterclaim, the trial court awarded Robert $5,000, but denied his claims for ejectment and to quiet title in him. Robert appeals, arguing that the remedy of specific performance is wholly inappropriate for the reasons previously stated.2 The decision whether to decree specific performance of a contract is a matter that lies within the sound judicial discretion of the trial court and it will not be disturbed on appeal unless it is clearly erroneous . Bliss v. Hallock, 113 So. 2d 889 (Fla. 1959); Martin v. Albee, 113 So. 415 (Fla. 1927); Jordan v. Boisvert, 632 So. 2d 254, 256 (Fla. 1st DCA 1994); Henderson Dev. Co. v. Gerrits, 340 So. 2d 1205, 1206 (Fla. 3d DCA 1976) (citing Molina v. Reiss, 254 So. 2d 853 (Fla. 3d DCA 1971)); see also Rybovich Boat Works, Inc. v. Atkins, 585 So. 2d 270, 272 (Fla. 1991). The exercise of that discretion is governed by consideration of all of the facts and circumstances of the case and application of well-settled legal and equitable principles. Bliss; Stein v. Brown

Although Robert also appeals raising several issues regarding his counterclaim, we believe no error was committed by the trial court as to those issues and so we affirm that part of the judgment without further elaboration. 4

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Props., Inc., 104 So. 2d 495 (Fla. 1958); Martin; Humphrys v. Jarrell, 104 So. 2d 404, 410 (Fla. 2d DCA 1958). These considerations and applications make for the

advancement of justice and fairness, which are the ultimate goals to be achieved by invocation of this equitable remedy. Rybovich, 585 So. 2d at 272 ("[T]he court

contemplating an order of specific performance is obligated to consider whether this remedy, based on the facts of the case, would achieve an unfair or unjust result. If so, specific performance is not permitted.") (citing Todd v. Hyze r, 18 So. 2d 888 (Fla. 1944)). The relief requested in a suit for specific performance may be granted if it is first established that the contract is valid and enforceable. See Hembree v. Bradley, 528 So. 2d 116 (Fla. 1st DCA 1988); Parker v. Weiss, 404 So. 2d 820, 821 (Fla. 1st DCA 1981). This is one of those well-settled legal principles previously alluded to, and its status as a legal issue requires that we resolve it based on the de novo standard of review. Robert asserts the contract is invalid because it was not executed in the

presence of two subscribing witnesses. He bases this argument on the provisions of section 689.01, Florida Statutes, which essentially require that for a transfer of real estate or an interest in it to be valid, the instrument of conveyance must be in writing and signed by the grantor in the presence of two subscribing witnesses. Because this statute and its provisions regulate the mode of conveying real property or of creating an estate in it, the statute does not apply to documents that are not instruments of conveyance. Thus we must next determine whether the contract at issue here

constitutes an instrument of conveyance within the meaning of the statute.

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Our analysis of the contract leads us to the inevitable conclusion that it constitutes an agreement for deed, which is typically defined as an agreement that requires the seller to convey legal title to the buyer after the buyer pays all of the installments of the purchase price. White v. Brousseau, 566 So. 2d 832 (Fla. 5th DCA 1990). An agreement for deed is primarily utilized as a security device and an

alternative to immediate conveyance of title to the buyer with a purchase money mortgage back to the seller. Id.; see also Muina v. Canning, 717 So. 2d 550 (Fla. 1st DCA 1998); Purcell v. Williams, 511 So. 2d 1080 (Fla. 1st DCA 1987). The Legislature and this court have declared that such agreements are essentially mortgages with attendant rights and remedies provided to mortgagors and mortgagees, which include the seller's remedy of foreclosure if the buyer defaults and the buyer's right of redemption.

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