DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
LUZ MERY CANON,
Appellant,
v.
FERRIS ZIADIE,
Appellee.
No. 4D21-356
[September 15, 2021]
Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County, Mardi Levey Cohen, Judge; L.T. Case Nos. COCE19-8766
and CACE20-9966.
Samuel J. Gittle of EPGD Attorneys at Law, P.A., Miami, for appellant.
Charmaine Powell of the Law Office of Charmaine C. Powell, Miami, and
Charles H. Groves of the Law Offices of Charles H. Groves, North Miami,
for appellee.
FORST, J.
Appellant Luz Mery Canon (“Buyer”) appeals the amended final
judgment’s award of prevailing party attorney’s fees to Appellee Ferris
Ziadie (“Seller”). We agree with Buyer’s contention that she, not Seller,
prevailed on the underlying case’s most (if not only) significant issue.
Accordingly, we reverse.
Background
Buyer entered into a contract with Seller for the sale of real property.
Buyer placed $10,000 in escrow as a deposit. The contract included a
liquidated damages clause stating that if Buyer failed to diligently pursue
financing, Buyer would be in default and would forfeit the entire $10,000
deposit to Seller.
Buyer obtained preliminary approval for a loan application. However,
six days before closing, Buyer voluntarily terminated her employment with
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the United States Army. As a result, the lender was unable to verify
Buyer’s income and rejected her loan application.
Seller informed Buyer that as a sign of good faith, Seller would allow
Buyer an opportunity to “regroup” with a lender to obtain financing.
However, Seller stated that as a contingency, the property would be put
back on the market, though Buyer’s contract would be given top priority.
Approximately ten days later, Seller informed Buyer that he was
canceling the contract based on her failure to obtain financing. Seller also
stated that he was retaining the entire $10,000 deposit pursuant to the
liquidated damages clause. Seller subsequently sold the property to a
different buyer (at a higher sales price than Buyer’s offer).
Buyer filed a claim against Seller alleging that Seller breached the
contract by: (1) failing to provide notice that he was no longer interested
in moving forward with the contract, and (2) selling the property to another
buyer while simultaneously giving an extension to Buyer to obtain
financing. Buyer’s complaint requested the deposit’s return, as well as
“reliance damages for [two months of storage—about $1,600] and other
fees [about $525] needlessly incurred.”
In response, Seller raised a counterclaim, alleging that Buyer breached
the contract by failing to diligently pursue financing, and further
contending that he was entitled to retain the deposit pursuant to the
liquidated damages clause. Buyer then raised an affirmative defense
alleging that she was entitled to recover her deposit because the liquidated
damages clause was unenforceable.
Following the bench trial’s conclusion, the trial court issued a final
judgment, finding that Buyer breached the contract because she did not
diligently pursue financing. However, the court stated that “[n]either party
presented evidence or even argued as to the damages,” thus the court
awarded no damages to Seller. Additionally, the court found that the
liquidated damages clause was not enforceable because it lacked
mutuality of obligation and further stated that “[t]o award [Seller] the full
deposit amount of $10,000 after the property was sold would amount to
an unfair windfall for [Seller].” As a result, the court ordered Seller to
return Buyer’s deposit. Lastly, the court found that Seller was the
prevailing party and ordered Buyer to pay Seller’s reasonable attorney’s
fees.
Buyer moved for rehearing and to alter the final judgment, arguing that
she was the prevailing party because she prevailed on her affirmative
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defense which forced Seller to return the deposit. The trial court denied
the motion, maintaining that Seller was the prevailing party, and issued
an amended final judgment stating in pertinent part:
The prevailing party in this case is [Seller] as he has prevailed
on the breach of contract counter-claim against [Buyer].
Pursuant to Moritz v. Hoyt Enterprises, Inc.,
604 So. 2d 807
(Fla. 1992), a purchaser who sued a vendor for breach of
contract on the purchase of a new construction house and did
not prevail and was found to have breached the contract while
nonetheless being entitled to partial deposit returned, was not
the prevailing party for purposes of awarding attorney fees
pursuant to the contract terms. The vendor prevailed on his
breach of contract counter-claim even though he had to
return partial deposit. Accordingly, [Buyer] in the instant case
has failed to prove her case and has been found to have
breached the contract. [Seller] has prevailed on the counter-
claim for breach of contract. [Seller] is the prevailing party
even though he failed to prove damages and is ordered to
return the deposit funds.
The instant appeal followed.
Analysis
“The standard of review of a trial court’s ruling on the issue of
entitlement to prevailing party attorney’s fees is abuse of discretion.”
Skylink Jets, Inc. v. Klukan,
308 So. 3d 1048, 1051 (Fla. 4th DCA 2020).
The determination of the prevailing party rests on whether the party
“succeeded on any significant issue in litigation which achieves some of
the benefit the parties sought in bringing suit.” Trytek v. Gale Indus., Inc.,
3 So. 3d 1194, 1200 (Fla. 2009) (citation and alteration omitted).
On appeal, Buyer argues that the trial court erred in determining that
Seller was the prevailing party in the underlying action and its reliance on
Moritz was misplaced. We agree.
In Moritz, the parties entered into a contract for the construction of a
home and the plaintiffs paid a total deposit of $57,877.45.
604 So. 2d at
808. The plaintiffs eventually complained about the quality of certain
items and asserted that the quality was inconsistent with that of a
luxurious custom home.
Id. The plaintiffs then purchased a different
house.
Id. Following that transaction, the plaintiffs sent a letter to the
defendant, repudiating the home construction contract on the grounds
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that the house had not been built according to the plans and demanding
the return of their deposit.
Id. The defendant later sold the home for
$10,000 below the plaintiff’s original purchase price, not including “the
extras.”
Id. The defendant “claimed it offered to return the [plaintiffs’]
deposit, minus damages caused by their breach, but the [plaintiffs]
refused.”
Id.
Following these events, the plaintiffs sued, seeking the refund of their
deposit, and alleging that the defendant breached the contract by failing
to construct the house in accordance with their agreement.
Id. The
defendant denied the allegations and brought a counterclaim for breach of
contract, alleging that the plaintiff’s repudiation caused it damages
exceeding $5,000.
Id. at 809.
The trial court found that the defendant was not entitled to retain the
deposit as liquidated damages and that “the measure of damages that
could be sought was limited to [the defendant’s] general compensatory
damages.”
Id. Based on these findings, the trial court directed the
defendant to return the total deposit, plus interest, in the amount of
$66.105.46.
Id. However, this was offset by the court ordering the
plaintiffs to pay compensatory damages based on the difference between
the home’s value at the time of the breach and the contract price, plus
interest—$20,579.56.
Id. As a result, the plaintiffs achieved a net
recovery of $45,525.90.
Id. Despite awarding the plaintiffs a net recovery,
the trial court determined that the defendant was the prevailing party for
purposes of awarding attorney’s fees.
Id. Ultimately, the Florida Supreme
Court affirmed and explained that the prevailing party was the party that
prevailed on “the significant issues in the litigation” and not necessarily
the party that achieved a net recovery.
Id. at 809–10.
The underlying case is distinguishable from Moritz. Here, both parties
brought a breach of contract claim, but neither argued for, nor presented,
any evidence of damages beyond the approximately $2,125 in “reliance
damages” requested by Buyer. Nor did either party seek nonmonetary
relief. Thus, the primary—if not only—“significant issue” in the underlying
litigation was not the recovery of damages arising from an alleged breach,
but rather, who was entitled to the deposit. In contrast, the primary issue
in Moritz was whether the defendant was entitled to compensation for the
damages that he incurred from the plaintiffs’ breach—specifically, because
the defendant was forced to sell the property at a lower amount than was
agreed to between the parties.
Id. at 808. Thus, the defendant in Moritz
had raised and prevailed on an issue that was separate from the retention
of the deposit.
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Moreover, in the instant case, Seller was seeking a specific kind of
relief—retention of the deposit—whereas Buyer’s principal objective was
recovering her deposit. The trial court ruled in favor of Buyer’s affirmative
defense, and in doing so, found that the liquidated damages clause was
unenforceable and ordered Seller to return the deposit. Under these
circumstances, it was unreasonable for the trial court to find Seller was
nevertheless the prevailing party because this finding was based on a
ruling that did not provide Seller with his sought-after relief (the retention
of the deposit). 1 Therefore, we find that the trial court erred in awarding
Seller prevailing party attorney’s fees.
Conclusion
The determinative and sole “significant” issue in this case was the
liquidated damages clause’s enforceability. Following the trial court’s
ruling that the clause was not enforceable, the breach of contract issue
became mostly irrelevant, and Seller never obtained his sought-after relief
(retention of the deposit). Accordingly, we reverse the trial court’s
determination that Seller was the prevailing party and remand with
instructions to award Buyer reasonable attorney’s fees as the prevailing
party.
Reversed and remanded.
KLINGENSMITH and ARTAU, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
1 In his counterclaim, Seller does not allege any facts showing that he suffered
damages. The counterclaim simply states that “[d]ue to [Buyer’s] Breach of
Contract [Seller] has suffered damages.” This fails to allege any ultimate facts
elucidating the damages allegedly sustained. See, e.g., Louie’s Oyster, Inc. v.
Villaggio Di Las Olas, Inc.,
915 So. 2d 220, 221–22 (Fla. 4th DCA 2005) (“Unlike
the pleading requirements in the federal courts where notice pleading is the
prevailing standard, the Florida Rules of Civil Procedures require fact pleading.
To state a cause of action, a complaint must allege sufficient ultimate facts to
show that the pleader is entitled to relief.” (citations omitted)). Furthermore, the
trial court’s amended final judgment states that Seller did not argue for or provide
proof of any damages.
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