DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
ALINE NORMAN,
Appellant,
v.
JANNE JAIMES,
Appellee.
No. 4D19-83
[July 31, 2019]
Appeal from the Circuit Court for the Nineteenth Judicial Circuit,
Okeechobee County; Laurie E. Buchanan, Judge; L.T. Case No.
472013CA000447.
Colin M. Cameron of Colin M. Cameron, P.A., Okeechobee, for
appellant.
No appearance for appellee.
GERBER, J.
A home property seller appeals from the circuit court’s final judgment,
which effectively awarded the seller’s property to the buyer on the basis
that the seller failed to disclose a recorded lien encumbering the property.
The seller argues that the buyer was on constructive notice of the recorded
lien, and that the circuit court’s final judgment improperly modified the
parties’ contract by allowing the buyer to pay only a small portion of the
property’s purchase price, while depriving the seller of the property’s full
value and the agreed-upon interest to be paid over time.
We agree with the seller’s arguments. While we respect the circuit
court’s described motivation “to do equity between the parties,” the only
legally proper result of this action was to enter final judgment in the seller’s
favor on both the buyer’s complaint and the seller’s counterclaim.
We present this opinion in three parts:
1. the circuit court’s findings of fact;
2. the circuit court’s conclusions of law; and
3. our review.
1. The Circuit Court’s Findings of Fact
We present the circuit court’s findings of fact in the final judgment to
the extent such findings are supported by competent, substantial
evidence. See Acoustic Innovations, Inc. v. Schafer,
976 So. 2d 1139, 1143
(Fla. 4th DCA 2008) (“When a decision in a non-jury trial is based on
findings of fact from disputed evidence, it is reviewed on appeal for
competent, substantial evidence.”). Other record facts are included below
where necessary to provide a complete picture of the material facts.
The parties entered into an agreement for deed (“the contract”). The
contract provided that the buyer would purchase the property from the
seller for $85,000 plus 10% interest (later adjusted to 9%), to be paid with
a $5,000 down payment and monthly payments of $650 per month. The
contract further provided that upon the buyer making the payments set
forth above, the seller would deliver clear title to the buyer. The contract
required the buyer to pay all taxes, assessments, or impositions levied on
the property beginning with the calendar year after the contract was
executed.
The parties executed the contract at a title company’s office, but the
title company did not conduct a title search of the property and did not
issue title insurance thereon.
Some years after the parties executed the contract and the buyer was
living on the property, county code enforcement personnel arrived on the
property. The code enforcement personnel advised the buyer that,
sometime before the parties executed the contract, the county had
recorded a lien on the property due to an unapproved structure which the
seller had placed on the property. Since the lien’s imposition, the lien had
been accruing a $25 per day fine, and ballooned to $83,000 in total. The
buyer demolished the structure, and the county ceased imposing the fine.
The buyer received legal advice to stop making her monthly payments
to the seller. Although the buyer had paid significant sums to the seller,
primarily towards the interest owed on the purchase, the remaining
principal balance which the buyer owed on the purchase was $83,910.41.
The buyer sued the seller in five counts, which appear to have been
pled in the alternative: (1) declaratory relief to require the seller to convey
clear title to the buyer; (2) damages for breach of contract for not conveying
clear title to the buyer; (3) damages for fraudulent misrepresentation for
not disclosing the lien; (4) damages for negligent misrepresentation for not
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disclosing the lien; and (5) rescission of the contract for not disclosing the
lien.
The seller counterclaimed to foreclose on the contract, which was being
treated as a mortgage.
At trial, the seller testified that she notified the buyer of the lien’s
existence before the parties executed the contract. The buyer testified she
did not know about the lien’s existence, and when she confronted the seller
about the lien’s existence, the seller responded that the lien would be
taken care of. The circuit court found that the buyer’s testimony was
credible on this topic, and the seller’s testimony was not credible.
The seller conceded that it was her obligation to clear the lien, and that
the county had an amnesty program by which the county could forgive all
or part of the fine supporting the lien. However, the seller conceded that
she had taken no action to apply for amnesty, and did not have the
financial ability to pay the fine and convey clear title to the buyer.
The buyer ultimately argued that the seller, by failing to pay the lien,
anticipatorily breached the contract, thereby justifying the buyer ceasing
the monthly payments.
The seller argued that until the buyer made all of the payments under
the contract, the seller was not required to convey title free and clear of
the lien. The seller also argued that because the lien had been recorded,
the buyer had been on constructive notice of the lien, and the buyer’s
ceasing of the monthly payments was unjustified.
2. The Circuit Court’s Conclusions of Law
Based on the foregoing evidence and arguments, the circuit court made
the following conclusions of law:
[A] gross inequity would result if [the buyer] had to pay the
entire . . . purchase price only to find out at the end that [the
seller] does not have the financial ability to convey clear title.
[T]he [seller’s] stated inability to satisfy the code
enforcement lien constituted anticipatory breach which
justified [the buyer] stopping payments under the [contract]
and that [the seller] is thereby precluded from recovery of the
property by foreclosure thereunder.
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[W]hile [the buyer] has paid [the seller] a substantial
amount of money under the [contract], [the buyer] has paid
far less than she agreed to pay, notwithstanding the fact that
[the seller] does not have the financial ability to convey clear
title, irrespective of the amount agreed to be paid by [the
buyer].
[T]o do equity between the parties and permit each to have,
at least partially, the benefit of their respective bargains, upon
receipt of $910.41 from [the buyer], [the seller] should
immediately convey the property to [the buyer] by Special
Warranty Deed (excluding the warranty to pay the code
enforcement lien) and that [the buyer] should be responsible
for satisfying the lien which clouds her property . . . .
Based on the above, it is
ORDERED AND ADJUDGED as follows:
A. The [buyer’s] request for declaratory relief as set forth
in Count 1 of the Complaint is GRANTED.
B. The [buyer] . . . shall deliver to [the seller] the sum of
$910.41, representing the difference between the
remaining principal balance ($83,910.41) and the
county lien upon the property ($83,000).
C. The [seller] . . . within 10 days from the date of delivery
of the payment . . . shall execute a Special Warranty
Deed in [f]avor of [the buyer] for the property set forth
in the Contract . . . . Said Special Warranty Deed shall
exclude only the [c]ode enforcement lien which clouds
the property and [the buyer] shall take title subject to
said lien and shall bear sole responsibility for clearing
said cloud on her title.
D. [The buyer’s] other counts shall be subsumed in the
granting of the request for declaratory relief as set forth
above.
E. [The seller’s] Counterclaim is hereby DISMISSED. . . .
(paragraph numbers omitted).
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3. Our Review
This appeal followed. The seller argues that the buyer was on
constructive notice of the recorded lien, and that the circuit court’s final
judgment improperly modified the parties’ contract by allowing the buyer
to pay only a small portion of the property’s purchase price, while depriving
the seller of the property’s full value and the agreed-upon interest to be
paid over time.
We agree with the seller’s arguments. Regardless of whether the seller
informed the buyer of the lien’s existence, the lien was recorded before the
parties entered into the contract, and the buyer ultimately did not present
any evidence that the seller made any misrepresentation regarding
whether a lien existed or not, whether fraudulently or negligently. Thus,
the buyer had constructive notice of the lien’s existence. Cf. M/I
Schottenstein Homes, Inc. v. Azam,
813 So. 2d 91, 95 (Fla. 2002)
(“Knowledge of clearly revealed information from recorded documents
contained in the records constituting a parcel’s chain of title is properly
imputed to a purchasing party, based upon the fact that an examination
of these documents prior to a transfer of the real property is entirely
expected.”); Lafitte v. Gigliotti Pipeline, Inc.,
624 So. 2d 844, 845 (Fla. 2d
DCA 1993) (“Constructive notice is information or knowledge of a fact
imputed by law to a person although he may not actually have it[], because
[the person] could have discovered the fact by proper diligence, and [the
person’s] situation was such as to cast upon [that person] the duty of
inquiring into it.”) (citation and internal quotations marks omitted).
The circuit court’s conclusion that the seller’s present inability to satisfy
the code enforcement lien constituted anticipatory breach, was error.
Under the contract’s plain language, the seller was not obligated to deliver
clear title to the buyer until the buyer made the payments set forth in the
contract, an event which remained years away and which may never have
occurred if the buyer defaulted on the payments. See Ryan v. Landsource
Holdings Co.,
127 So. 3d 764, 768 (Fla. 2d DCA 2013) (“To be entitled to
damages based upon an anticipatory breach, the nonbreaching party must
establish its ability to perform at the time of the breach. The rationale for
this rule is that the holder of the duty based upon a condition precedent
cannot profit from an anticipatory repudiation of a contract that he would
have breached himself.”) (internal citations, quotation marks, and
brackets omitted); Alvarez v. Rendon,
953 So. 2d 702, 709 (Fla. 5th DCA
2007) (“An anticipatory breach of contract occurs before the time has come
when there is a present duty to perform as the result of words or acts
evincing an intention to refuse performance in the future.”) (emphasis
added).
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The circuit court also erred in using its declaratory relief powers to
modify the parties’ contract into a contract of the court’s own creation.
That is, the court modified the contract from one in which the buyer was
to purchase the property for $85,000 plus interest, into one in which the
buyer was permitted to purchase the property for whatever amount the
buyer had paid to the seller up until the point of the judgment, plus
“$910.41, representing the difference between the remaining principal
balance ($83,910.41) and the county lien upon the property ($83,000).”
Although we can appreciate the court’s motivation was “to do equity
between the parties,” there simply is no legal basis for the manner in which
the court rewrote the parties’ obligations under the contract. See
Prudential Ins. Co. of America v. Wynn,
398 So. 2d 502, 503 (Fla. 3d DCA
1981) (“Notwithstanding that the trial court may have been benignly
motivated, it was not empowered to violate the sanctity of [the parties’]
contract.”).
Although the buyer has not cross-appealed in this case, we note that
the circuit court’s modification of the contract also may have prejudiced
the buyer. Under the contract’s plain language, the buyer, upon making
the payments set forth in the contract, was to receive clear title to the
property. Instead, according to the circuit court’s final judgment, the
buyer was saddled with clouded title to the property, in the form of an
$83,000 lien. Although the county may have had an amnesty program by
which the county could forgive all or part of the fine supporting the lien, it
is beyond our record whether the buyer would have received any amnesty
from the lien as consideration for having demolished the structure which
led to the fine’s imposition.
As for the seller’s counterclaim to foreclose on the contract, the seller
provided competent substantial evidence to support that action, as it was
undisputed that the buyer ceased making the monthly payments. All of
the buyer’s affirmative defenses to that action lacked merit, as each
defense relied upon the buyer’s argument that the seller failed to disclose
the recorded lien encumbering the property. Because the buyer was on
constructive notice of the recorded lien’s existence, the buyer’s ceasing of
the monthly payments was unjustified.
In sum, while we respect the circuit court’s motivation “to do equity
between the parties,” the only legally proper result of this action was to
enter final judgment in the seller’s favor on both the buyer’s complaint and
the seller’s counterclaim. Therefore, we reverse the circuit court’s final
judgment, and remand for entry of a legally proper final judgment.
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Reversed and remanded.
LEVINE, C.J., and KUNTZ, J., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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