All Seasons Condo Assoc. v. Patrician Hotel

Third District Court of Appeal
State of Florida
Opinion filed April 24, 2019.
Not final until disposition of timely filed motion for rehearing.
________________
Nos. 3D17-132 & 3D17-130
Lower Tribunal No. 12-1350
________________
All Seasons Condominium Association, Inc., Pedro Dedesma a/k/a
Peter Dedesma, Manuel De La Morena, Emilio Gomez,
and John Sanchez, et al.,
Appellants,
vs.
Patrician Hotel, LLC, and All Seasons Suites, LLC,
Appellees.
Appeals from the Circuit Court for Miami-Dade County, Rosa I. Rodriguez,
Judge.
Fowler White Burnett, P.A., and Alice K. Sum; Dorta & Ortega, P.A., and
Omar Ortega and Rosdaisy Rodriguez, for appellants.
Smoler & Associates, P.A., and Bruce J. Smoler (Hollywood); Phillips,
Cantor & Shalek, P.A., and Jeffrey B. Shalek, and Gary S. Phillips (Hollywood),
for appellees.
Before LOGUE, LINDSEY and HENDON, JJ.1
LINDSEY, J.
1 Judge Hendon did not participate in oral argument.
In these consolidated cases, All Seasons Condominium Association, Inc.
(the “Association”), Pedro Dedesma a/k/a Peter Dedesma, Manuel De La Morena,
Emilio Gomez, John Sanchez, and Vero Financial Services, et al. (the “Unit
Owners”)2 appeal the trial court’s final judgment as to liability in favor of plaintiff,
Patrician Hotel, LLC and intervening plaintiff, All Seasons Suites, LLC (the “Final
Judgment”) rendered on December 15, 2016. For the reasons set forth below, we
reverse and remand for further proceedings.
I. BACKGROUND
On October 15, 2010, the Association, acting through its Board of Directors
(the “BOD”), unanimously voted to sell the All Seasons Condominium (the
“Condominium”)—located at 3621 Collins Avenue, Miami Beach and consisting
of 106 separate condominium units—to Simon Nemni (“Nemni”) for
approximately $7.3 million.3 The BOD and Nemni entered into a Real Estate
Purchase and Sale Agreement (the “Master Purchase Agreement”) with an
effective date of October 19, 2010 (the “Effective Date”).
The Master Purchase Agreement required the Association, within 120 days
of the Effective Date, to use its best efforts to obtain consent from 100 percent of
the Unit Owners to sell their respective units (the “Sale Approval”). Specifically,
Paragraph 6 of the Master Purchase Agreement provides:
2 While this action was pending, appellants, Eugenio Carrasco and Irma Carrasco,
owners of Unit 305, voluntarily dismissed their appeal.
3 On August 5, 2011, Nemni assigned his interest in the Master Purchase
Agreement to Patrician Hotel, LLC (“Patrician”).
2
Seller shall use its best efforts to obtain written
acceptance by each unit owner to the sale of the units in
accordance with the terms of this Agreement. If Seller
obtains fewer than 100 percent of acceptance of the unit
owners, but approval by a sufficient number of unit
owners to satisfy the requirements of § 718.117, Florida
Statutes, then Seller, at its sole and absolute election,
may seek approval by a court of competent jurisdiction of
a plan of termination that incorporates the terms of this
Agreement. Seller shall have one hundred twenty (120)
days from the Effective Date of this Agreement to
either obtain the consent of all unit owners to a
closing under this Agreement, or a court order
approval (collectively, “Sale Approval”). In the event
Seller is unable to obtain 100% approval of the unit
owners and elects not to seek court approval of a plan of
termination, or seeks but is unable to obtain a court order
approving the plan of termination within the applicable
time period, then Buyer shall be entitled to the immediate
return of its deposit and this Agreement shall be deemed
terminated and Seller shall have no liability whatsoever
to Buyer.
(Emphasis added). Under Paragraph 6, therefore, the 120-day deadline for Sale
Approval was February 16, 2011. Moreover, the Master Purchase Agreement
tethers the transaction’s “closing date” to the Sale Approval deadline, stating that
the sale closing shall be within sixty days of the Sale Approval.
To consummate the sale, the Association was required to obtain written
acceptance of every Unit Owner before February 16, 2011, which was to be
accomplished through the execution of a Supplemental Contract for Purchase and
Sale of All Seasons Condominium Unit (the “Supplemental Contract”) by each
individual Unit Owner and the Association. Each Supplemental Contract
incorporated the Master Purchase
3
Agreement by reference, therefore, every Unit Owner who executed a
Supplemental Contract joined the Master Purchase Agreement and agreed to sell
their respective unit to Patrician. In other words, the Association was obligated to
obtain a Supplemental Contract from every Unit Owner before February 16, 2011,
in order for the Condominium sale to move forward. Each Supplemental Contract
purportedly gave the BOD authority to take certain actions reasonably necessary to
complete the transaction. For example, Paragraph 9(f) of the Supplemental
Contract provides:
Seller proxies his vote, and this document shall serve as
such proxy, to the Board to vote in favor of any and all
resolutions deemed necessary by the Board under the
existing Declaration or By-Laws of the Association to
consummate the Master Purchase Agreement, the sale of
the Real Property, the plan of termination, or to
commence and prosecute any legal action necessary to
accomplish these matters.
The Master Purchase Agreement and Supplemental Contracts both contain
explicit “time is of the essence” provisions.4 Similarly, the Master Purchase
Agreement and Supplemental Contracts both include identical provisions requiring
any modification or amendment, to either agreement, be in writing and signed by
4 Paragraph 16 of each Supplemental Contract provides that “[t]ime is of the
essence of all the terms, provisions and covenants of this Agreement,” while
Paragraph 25 of the Master Purchase Agreement states in relevant part:
Time is of the essence of all the terms, provisions and
covenants of this Agreement. Time is important to both
Seller and Buyer in the performance of this Agreement,
and they have agreed that strict compliance is required as
to any date or time periods set forth or described herein.
4
all respective parties thereto. Paragraph 12 of the Supplemental Contract—which
is identical to Paragraph 20 of the Master Purchase Agreement—provides:
No amendment, change or modification of this
Agreement shall be valid, unless in writing and signed by
all of the parties hereto. Each Party has participated fully
in the negotiation and preparation of this Agreement with
full benefit of counsel. Accordingly, this Agreement
shall not be more strictly construed against any Party.
On December 19, 2010, counsel for Nemni sent an email to the
Association’s attorney, requesting a sixty-day extension of the inspection period
and a modification to Paragraph 6 of the Master Purchase Agreement regarding the
defined closing date. The email states in relevant part:
My client is spending significant time and money on this
project. He remains motivated and desires to undertake
all activities necessary to close this transaction
successfully. However, he will need a sixty (60) day
extension to the Inspection Period in order to position
this transaction for closing. In addition, since the closing
date is currently linked to the date on which your client
obtains Sale Approval, I would suggest modifying
Paragraph six (6) of the contract to state that the closing
date will be sixty (60) days following the conclusion of
the Inspection Period or sixty (60) days following the
date on which the Seller obtains Sale Approval,
whichever is later. Please submit this request to your
clients and advise me of their response as soon as
possible, as my client’s work is very much in process and
advancing. In the interim, this email is intended to protect
my client’s deposit from becoming non-refundable and
shall function as a termination of the contract in the
(hopefully unlikely) event that your clients do not agree
to the extension of the Inspection Period requested
herein.
Peter Dedesma, who was
5
President of the BOD and a Unit Owner, emailed the Association’s attorney on
December 28, 2010, stating, “I indicated to Mr. Nemni that the Board after
informal discussion decided [to] grant the 60 [day] extension and accept the
amendment to closing date but we need to wait until next week to hold a board
meeting to make it official.” Dedesma, Nemni, and the BOD ostensibly treated
these emails as an amendment to the Master Purchase Agreement and
Supplemental Contracts that extended the Sale Approval deadline by sixty days,
from February 16, 2011, to April 16, 2011. Dedesma testified at trial that only 67
of the 106 Unit Owners had signed Supplemental Contracts as of February 16,
2011.
On April 13, 2011, approximately fifty-six days after the original Sale
Approval deadline of February 16, 2011, had expired, the BOD held a meeting and
voted unanimously to approve the First Addendum to the Master Purchase
Agreement (the “First Addendum”). The First Addendum extended the Sale
Approval deadline for five periods of sixty days each (the “Extension Periods”),
for a total possible extension of 300 days. Additionally, although the First
Addendum permitted Nemni, as the Buyer, to terminate the agreement at the end
of each Extension Period, it is silent as to the Seller’s ability to terminate.
On November 22, 2011, All Seasons Suites, LLC (“Suites”) entered into an
agreement to acquire all of the membership interest in Patrician after Patrician
closed under the Master Purchase Agreement, which would make Suites the owner
6
of the Condominium upon completion of the Condominium sale. Pursuant to the
terms of the agreement with Suites, Nemni was to realize a profit of over $3
million. On December 11, 2011, the BOD, through its counsel, sent a letter to
Nemni’s attorney (the “Termination Letter”), advising that the Association would
not exercise the final Extension Period under the First Addendum and that it was
terminating the Master Purchase Agreement because “the Association is unable to
obtain 100% acceptance by the unit owners to the sale.” The Termination Letter
further provided that the Association would authorize the immediate release of
Nemni’s deposit being held in escrow.
Patrician filed an action for specific performance on January 9, 2012. A
notice of lis pendens was recorded on January 25, 2012, and a non-jury trial was
ultimately held on April 12-14 and 19-21, 2016. The trial court entered its
Findings of Fact and Conclusions of Law on July 25, 2016, concluding that
Paragraph 9(a), 9(b), 9(e), and 9(f) of the Supplemental Contracts demonstrate that
the Unit Owners gave explicit authority to the BOD to act on their behalf. More
specifically, although the trial court found that the proxy language in Paragraph
9(f) was not a statutory proxy governed by section 718.112, Florida Statutes
(2010), or a General Real Estate Power of Attorney, the trial court did conclude
that Paragraph 9(f) was a general proxy by which the Unit Owners gave the BOD
authority to take all action reasonably necessary to effectuate a closing under the
Master Purchase Agreement.
7
On December 15, 2016, the trial court entered final judgment for specific
performance and damages in favor of Patrician and against the Association as well
as certain Unit Owners. Final judgment was also entered for specific performance
in favor of Suites and against Presidential Management Group, Inc. Defined
Benefit Plan (“Presidential Management”).5 Additionally, final judgment was
entered as to liability only for tortious interference with an advantageous business
relationship in favor of Suites and against Dedesma and the Association.
However, the trial court reserved jurisdiction to: (i) enter subsequent order(s) in
favor of Patrician and against applicable defendants to determine the amount of
damages to be awarded to Patrician, and (ii) conduct a trial on the issue of damages
regarding the finding of liability in favor of Suites and against Dedesma and the
Association.6 This timely appeal followed.
II. JURISDICTION
The trial court’s Final Judgment is a non-final order because it reserved
jurisdiction to determine the amount of damages to be awarded to Patrician and to
also conduct a trial on the issue of damages regarding the finding of liability in
5 Presidential Management was the sole member of Patrician Hotel, LLC. Nemni,
as the authorized agent for Presidential Management, executed the November 22,
2011 agreement with All Seasons Suites, LLC, whereby Suites was to acquire
Presidential Management’s 100 percent member interest in Patrician.
6 We decline to address the portion of the final judgment on the tortious
interference claim as well as the trial court’s reservation of jurisdiction to enter
subsequent orders to determine damages, and to conduct an additional trial on
damages – without making a finding as to whether those portions of the order on
appeal are final and, consequently, whether we have jurisdiction – because those
issue are moot based on our decision herein.
8
favor of Suites. See 1st Priority Restoration, Inc. v. Salame, 129 So. 3d 1171 (Fla.
3d DCA 2014) (holding that a portion of the trial court’s order was not final or
appealable because the underlying net damages amount had not yet been
adjudicated and reduced to a final judgment). However, orders that determine “the
right to immediate possession of property” are non-final orders appealable under
Florida Rule of Appellate Procedure 9.130(a)(3)(C)(ii). Fla. R. App. P.
9.130(a)(3)(C)(ii). We therefore treat the appeal in this case as one taken from a
non-final order that determines the right to immediate possession of property
because the trial court’s grant of specific performance concerned the immediate
right to real property under the Master Purchase Agreement and Supplemental
Contracts. See Malek v. Bright, 7 So. 3d 598, 598 (Fla. 3d DCA 2009) (“Upon
further review of the jurisdictional questions promulgated by this Court to the
parties sua sponte in this case, we treat the appeal in this case as one taken from
nonfinal orders which determine the right to immediate possession of property
under Florida Rule of Appellate Procedure 9.130(a)(3)(C)(ii).”).
III. STANDARD OF REVIEW
A trial court’s decision to grant specific performance is reviewed under an
abuse of discretion standard. See Muniz v. Crystal Lake Project, LLC, 947 So. 2d
464, 469 (Fla. 3d DCA 2006) (“The decision whether to grant or withhold a
judgment for specific performance is a matter within the sound discretion of the
trial court which will not be disturbed on appeal unless clearly erroneous.”).
9
However, the interpretation of a contract involves a pure question of law that is
subject to a de novo standard of review. Hammond v. DSY Developers, LLC, 951
So. 2d 985, 988 (Fla. 3d DCA 2007) (citing Florida Power Corp. v. City of
Casselberry, 793 So. 2d 1174, 1178 (Fla. 5th DCA 2001)).
IV. ANALYSIS
Specific performance is an equitable remedy that can “only be granted when
1) the plaintiff is clearly entitled to it, 2) there is no adequate remedy at law, and 3)
the judge believes that justice requires it.” Castigliano v. O'Connor, 911 So. 2d
145, 148 (Fla. 3d DCA 2005) (citing Mrahunec v. Fausti, 385 Pa. 64, 68, 121 A.2d
878, 880 (1956)). “In order for a contract to be subject to specific performance, it
must appear from the writing constituting the contract that the obligations of the
parties with respect to [the] conditions of the contract and actions to be taken by
the parties are clear, definite and certain.” de Vaux v. Westwood Baptist Church,
953 So. 2d 677, 682 (Fla. 1st DCA 2007) (quoting Brown v. Dobry, 311 So. 2d
159, 160 (Fla. 2d DCA 1975)); see also 330 Michigan Ave., Inc. v. Cambridge
Hotel, Inc., 183 So. 2d 725, 726–27 (Fla. 3d DCA 1966) (“Specific performance
will not be enforced where the contract is not definite and certain as to essential
terms and provisions and is incapable of being made so by the aid of legal
presumption or evidence of established customs.”).
Therefore, in order to obtain specific performance of an enforceable contract
for the purchase and sale of real property, the statute of frauds7 requires the
10
contract be in writing and signed by the party against whom enforcement is sought.
See India Am. Trading Co., Inc. v. White, 896 So. 2d 859, 860 (Fla. 3d DCA
2005) (“Pursuant to the statute [of frauds], no action can be brought to enforce a
contract for the sale of land unless the contract is in writing and signed by the party
to be charged.” (quoting Cavallaro v. Stratford Homes, Inc., 784 So. 2d 619, 621
(Fla. 5th DCA 2001). Thus, this Court has held that the statute of frauds requires
satisfaction of the following two conditions in order to obtain specific performance
of a contract for the sale of real property: (i) “the contract must be a writing signed
by the party against whom enforcement is sought,” and (ii) “the writing must
contain all of the essential terms of the sale and these terms may not be explained
by resort to parol evidence.” Fox v. Sails at Laguna Club Dev. Corp., 403 So. 2d
456, 458 (Fla. 3d DCA 1981) (citing Rundel v. Gordon, 111 So. 386 (Fla. 1927)).
As a general rule, “[t]here is no definitive list of essential terms that must be
present and certain to satisfy the statute of frauds. Rather, the essential terms will
vary widely according to the nature and complexity of each transaction and will be
evaluated on a case by case basis . . . .” Socarras v. Claughton Hotels, Inc., 374
7Florida’s statute of frauds is outlined in section 725.01, Florida Statutes (2010),
and provides in pertinent part:
No action shall be brought whereby . . . to charge any
person . . . upon any contract for the sale of lands . . .
unless the agreement or promise upon which such action
shall be brought, or some note or memorandum thereof
shall be in writing and signed by the party to be charged
therewith or by some other person by her or him
thereunto lawfully authorized.
11
So. 2d 1057, 1060 (Fla. 3d DCA 1979).
In the instant case, the dispositive question before us is whether the Unit
Owners gave authority to the BOD and Dedesma, through the Supplemental
Contracts, to take all action reasonably necessary to effectuate a closing under the
Master Purchase Agreement, including the extension of the Sale Approval deadline
and execution of the First Addendum. Absent such grant of authority by the Unit
Owners, the Master Purchase Agreement and Supplemental Contracts
automatically terminated on February 16, 2011, when the Sale Approval
prerequisite of 100 percent Unit Owner consent was not satisfied.
A. The Proxy Provision
Patrician and Suites contend that the proxy language under Paragraph 9(f),
whether read in isolation or together with other provisions in the Supplemental
Contracts, operates as a general proxy that provided the BOD with actual authority
to bind the Unit Owners to the Master Purchase Agreement and First Addendum.
However, pursuant to section 718.112, Florida Statutes (2010), “unit owners in a
residential condominium may not vote by general proxy, but may vote by limited
proxies substantially conforming to a limited proxy form adopted by the [Division
of Florida Condominiums, Timeshares, and Mobile Homes].” § 718.112(2)(b)2,
Fla. Stat. (2010).
Accordingly, the Division of Florida Condominiums, Timeshares, and
Mobile Homes (the “Division”) promulgated Florida Administrative Code Rule
12
61B-23.002(5), which states that unit owners, while not permitted to vote by
general proxy, “may vote by limited proxy substantially similar to the SAMPLE
LIMITED PROXY FORM adopted by the division as DBPR Form CO 6000-7.”
Fla. Admin. Code R. 61B-23.002(5) (2010). In no way does the one-sentence
proxy language of Paragraph 9(f), nor any other provision of the Supplemental
Contract or Master Purchase Agreement, bear any resemblance or similarity to the
sample proxy form adopted by the Division as DBPR Form CO 6000-7.
Moreover, to the extent Patrician and Suites contend that Paragraph 9(f) should be
treated as a general proxy not governed by chapter 718 of the Florida Statutes, we
disagree because such a position overlooks the simple fact that this entire dispute
concerns the failed purchase and sale of a condominium building. Furthermore,
both the Supplemental Contracts and Master Purchase Agreement state that certain
obligations contained therein must comply with the statutory requirements or
procedures under chapter 718. As such, the proxy provision of the Supplemental
Contracts is not a valid proxy, general or limited, under Florida condominium law.
B. Actual Authority
Patrician and Suites also assert that, pursuant to the Supplemental Contracts,
the Unit Owners provided actual and apparent authority to Dedesma and the BOD
to act on their behalf for all purposes related to closing under the Master Purchase
Agreement. To establish the existence of an actual agency relationship, the
following essential elements must be established: “(1) acknowledgment by the
13
principal that the agent will act for him, (2) the agent’s acceptance of the
undertaking, and (3) control by the principal over the actions of the agent.”
Fernandez v. Florida Nat’l Coll., Inc., 925 So. 2d 1096, 1101 (Fla. 3d DCA 2006)
(quoting Goldschmidt v. Holman, 571 So. 2d 422, 424 n.5 (Fla. 1990)).
In the instant case, there can be no doubt that a Unit Owner who properly
executed a Supplemental Contract before February 16, 2011, gave certain limited
authority to the BOD to vote on their behalf for resolutions, under the Declaration
or By-Laws, which the BOD deemed necessary to consummate the transaction.
Paragraph 9(f), however, does not evince an actual agency relationship whereby a
Unit Owner, in signing a Supplemental Contract, manifested their intent to grant
the BOD and Dedesma actual authority to take any action on their behalf in order
to effectuate a closing. For example, Patrician and Suites contend that the
December 2010 email exchange between Nemni’s counsel, the Association’s
counsel, and Dedesma extended the Supplemental Contract deadlines because
Dedesma had the actual authority to take any action, on behalf of the Unit Owners,
to accomplish the Condominium’s sale. However, the express language of
Paragraph 9(f) makes no reference to Dedesma or the Supplemental Contracts,
while the record is silent as to any acknowledgment by the Unit Owners that
Dedesma or the BOD were granted such broad authority over their individual
property rights.
“It is axiomatic that the clear and unambiguous words of a contract are the
14
best evidence of the intent of the parties.” Murry v. Zynyx Mktg. Commc’ns, Inc.,
774 So. 2d 714, 715 (Fla. 3d DCA 2000) (citing Turk v. Hysan Prods. Co., 149 So.
2d 584, 585 (Fla. 3d DCA 1963)). Clear and unambiguous contracts, therefore,
“should be construed as written, and the court can give them no other meaning.”
Gulliver Schs., Inc. v. Snay, 137 So. 3d 1045, 1047 (Fla. 3d DCA 2014) (quoting
Khosrow Maleki, P.A. v. M.A. Hajianpour, M.D., P.A., 771 So. 2d 628, 631 (Fla.
4th DCA 2000)). In construing a contract, the legal effect of its provisions “must
be determined from the words of the entire contract and a court may not violate
clear meaning to create ambiguity.” AAA Life Ins. Co. v. Nicolas, 603 So. 2d
622, 623 (Fla. 3d DCA 1992) (citing Hoffman v. Robinson, 213 So. 2d 267, 268
(Fla. 3d DCA 1968)). “Stated another way, an isolated sentence of [a contract]
should not be construed alone, but it should be construed in connection with other
provisions . . . to arrive at a reasonable construction to accomplish the intent and
purpose of the parties.” Hand v. Grow Constr., Inc., 983 So. 2d 684, 687 (Fla. 1st
DCA 2008) (alteration in original) (internal quotations omitted).
Here, Paragraph 12 of the Supplemental Contracts and Paragraph 20 of the
Master Purchase Agreement both state in unambiguous and identical language that
“[n]o amendment, change or modification . . . shall be valid, unless in writing and
signed by all of the parties hereto.” Accordingly, if Paragraph 9(f) gave the BOD
and Dedesma actual authority to modify the Sale Approval deadline and other
essential terms of the executed Supplemental Contracts, as Patrician and Suites
15
argue properly occurred through the December 2010 email exchange and First
Addendum, Paragraph 12 of the Supplemental Contracts and Paragraph 20 of the
Master Purchase Agreement would be rendered useless and inexplicable. Perez-
Gurri Corp. v. McLeod, 238 So. 3d 347, 350 (Fla. 3d DCA 2017) (“[W]e are
constrained by law to construe a contract as a whole so as to give effect, as here, to
all provisions of the agreement if it can be reasonably done.” (quoting McArthur v.
A.A. Green & Co. of Fla., 637 So.2d 311, 312 (Fla. 3d DCA 1994))); see also
Silver Shells Corp. v. St. Maarten at Silver Shells Condo. Ass'n, Inc., 169 So. 3d
197, 203 (Fla. 1st DCA 2015) (“[A] cardinal principle of contract interpretation is
that the contract must be interpreted in a manner that does not render any provision
of the contract meaningless.”). Thus, reading the Supplemental Contract “as a
whole,” Paragraph 9(f) does not confer actual authority upon the BOD or Dedesma
to act on behalf of the Unit Owners and modify the essential terms of their distinct
Supplemental Contracts.
Similarly, the proxy language of Paragraph 9(f) does not qualify as a general
power of attorney under Florida law.8 The trial court found that the December
2010 emails between Nemni’s counsel, the Association’s attorney, and Dedesma
operated as an extension of the Sale Approval deadline from February 16, 2011, to
8 The Florida Power of Attorney Act, §§ 709.2101-.2402, Florida Statutes (2011),
did not go into effect until October 1, 2011. See § 709.2106(2) (“A power of
attorney executed before October 1, 2011, is valid if its execution complied with
the law of this state at the time of execution.”). Thus, Paragraph 9(f) must be
considered under § 709.01-.11, Florida Statutes (2010).
16
April 16, 2011, because Dedesma had the authority to extend the Supplemental
Contracts for all Unit Owners who signed one. However, even under the most
generous reading of Paragraph 9(f), the purported proxy language does not confer
the authority upon the BOD, much less Dedesma, to unilaterally extend the Sale
Approval deadline and the defined closing date outlined in the Supplemental
Contracts. “The established rule is that a power of attorney must be strictly
construed and the instrument will be held to grant only those powers which are
specified.” Bloom v. Weiser, 348 So. 2d 651, 653 (Fla. 3d DCA 1977); see also
Dingle v. Prikhdina, 59 So. 3d 326, 328 (Fla. 5th DCA 2011) (“Generally, the rule
is that a power of attorney must be strictly construed and the instrument will be
held to grant only those powers which are specified.” (citing Bloom, 348 So. 2d at
653)).
Paragraph 9(f) of the Supplemental Contract states that the Unit Owner
“proxies his vote . . . to the Board to vote in favor of any and all resolutions
deemed necessary by the Board under the existing Declaration or By-Laws of the
Association to consummate the Master Purchase Agreement, the sale of the Real
Property, the plan of termination,” or to take legal action necessary to accomplish
such matters. Because neither Paragraph 9(f), nor any other provision of the
Supplemental Contracts, contain a specific grant of power authorizing the BOD or
Dedesma to modify essential terms of the Supplemental Contracts, no general
power of attorney existed to permit the extension of the Sale Approval deadline or
17
subsequent execution of the First Addendum on behalf of the Unit Owners.
C. Apparent Authority
Next, we address the issue of an agency relationship based on apparent
authority. “An agent’s authority need not be conferred in express terms, but may
be implied or apparent under justifying circumstances.” Am. Ladder & Scaffold
Co. v. Miami Ventilated Awning Mfg. Co., 161 So. 2d 699, 700 (Fla. 3d DCA
1964) (citing Thomkin Corp. v. Miller, 24 So. 2d 48, 49 (Fla. 1945)). An agency
relationship based on apparent authority only exists if the following three elements
are present: “1) a representation by the purported principal; 2) reliance on that
representation by a third party; and 3) a change in position by the third party in
reliance on the representation.” Ocana v. Ford Motor Co., 992 So. 2d 319, 326
(Fla. 3d DCA 2008) (citing Mobil Oil Corp. v. Bransford, 648 So. 2d 119, 121
(Fla. 1995)). “Apparent authority does not arise from the subjective understanding
of the person dealing with the purported agent, nor from appearances created by
the purported agent himself.” Izquierdo v. Hialeah Hosp., Inc., 709 So. 2d 187,
188 (Fla. 3d DCA 1998) (quoting Spence, Payne, Masington & Grossman, P.A. v.
Philip M. Gerson, P.A., 483 So. 2d 775, 777 (Fla. 3d DCA 1986)). Instead, the
words and actions of the principal must be the focus because apparent authority
exists only where the principal creates the appearance of an agency relationship.
See Guadagno v. Lifemark Hosps. of Fla., Inc., 972 So. 2d 214, 218 (Fla. 3d DCA
2007); see also Jackson Hewitt, Inc. v. Kaman, 100 So. 3d 19, 31 (Fla. 2d DCA
18
2011) (“In considering a claim based on apparent authority, the inquiry properly
focuses on the actions of or appearances created by the principal, not by the
agent.”). However, any reliance by a third party on a purported agent’s apparent
authority must be reasonable. Regions Bank v. Maroone Chevrolet, L.L.C., 118
So. 3d 251, 255 (Fla. 3d DCA 2013) (citing Izquierdo, 709 So. 2d at 188); see also
Sterling Crest, Ltd. v. Blue Rock Partners Realty Group, LLC, 164 So. 3d 1273,
1279 (Fla. 5th DCA 2015) (“Reliance of a third party on the apparent authority of
a principal’s agent must be reasonable and rest in the actions of or appearances
created by the principal, and not by agents who often ingeniously create an
appearance of authority by their own acts.” (internal quotations and citations
omitted)).
Here, there was no reasonable basis to believe that the BOD and Dedesma
had the apparent authority to modify essential terms within a Unit Owner’s
individually executed Supplemental Contract. Such a position is untenable and
would lead to illogical results. See King v. Bray, 867 So. 2d 1224, 1227 (Fla. 5th
DCA 2004) (“The courts generally agree that where one interpretation of a contract
would be absurd and another would be consistent with reason and probability, the
contract should be interpreted in the rational manner.”). For example, to accept the
apparent authority argument proffered by Patrician and Suites would mean the
BOD and Dedesma also possessed the authority to reduce the overall
Condominium sale price, so long as such action was deemed necessary to
19
consummate the transaction. This, in turn, would reduce the amount each Unit
Owner could ultimately receive for selling their individual property, which would
be an unreasonable outcome.
Accordingly, any reliance by a third party on such a tenuous appearance of
apparent authority is unreasonable. Indeed, Dedesma himself did not believe he
possessed the apparent authority to bind the Unit Owners, writing in response to
Nemni’s December 2010 deadline extension request that, “the Board after informal
discussion decided [to] grant the 60 [day] extension and accept the amendment to
closing date but we need to wait until next week to hold a board meeting to make it
official.”9 The record is silent as to any express or implied representation of
authority by the Unit Owners to Nemni or Suites that created the reasonable
appearance of an agency relationship with Dedesma or the BOD. See Roessler v.
Novak, 858 So. 2d 1158, 1162 (Fla. 2d DCA 2003) (“[A]pparent authority exists
only where the principal creates the appearance of an agency relationship.”).
Moreover, Patrician and Suites mistakenly rely on the conduct of Dedesma and the
BOD as manifestations of apparent authority. See Sterling Crest, Ltd., 164 So. 3d
at 1279 (“[M]anifestations of authority by a purported agent do not establish
apparent authority to act. Where there are no manifestations of authority by the
9 The record is not clear as to the nature of the BOD’s “informal discussion”
purportedly approving Nemni’s extension request. However, to the extent the
BOD used email to cast a vote on the issue, such action is explicitly prohibited
under section 718.112. See § 718.112(2)(c) (“Members of the board of
administration may use e-mail as a means of communication but may not cast a
vote on an association matter via e-mail.”).
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principal to a third party, apparent authority is not in issue.”).
Furthermore, the plain language of the Supplemental Contracts and the
Master Purchase Agreement establish that the parties agreed not to allow a waiver
or modification of any contractual term without first reducing it to writing. See
Bradley v. Sanchez, 943 So. 2d 218, 222 (Fla. 3d DCA 2006) (finding a contract
provision that provided “[m]odifications of this Contract will not be binding unless
in writing, signed and delivered by the party to be bound” was language that
prevented an oral waiver or modification to the written contract). Similarly,
Paragraph 12 of the Supplemental Contracts and Paragraph 20 of the Master
Purchase Agreement clearly state that “[n]o amendment, change or modification of
this Agreement shall be valid, unless in writing and signed by all of the parties
hereto.” This language prevents an oral modification or waiver of the closing date
and Sale Approval deadline. See Henley v. MacDonald, 971 So. 2d 998, 1001
(Fla. 4th DCA 2008) (concluding that the language of a similar provision
precluded an oral waiver or modification of the closing date). Accordingly, the
time of the essence provisions found in Paragraph 16 and Paragraph 25 of the
Supplemental Contract and Master Purchase Agreement, respectively, could not
have been waived by Dedesma or the BOD unless in writing and signed by all
parties against whom the waiver was asserted. See Rybovich Boat Works, Inc. v.
Atkins, 587 So. 2d 519, 522 (Fla. 4th DCA 1991) (“Thus under the anti-waiver
provision of this agreement the time of the essence provision could not have been
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waived unless there was a writing signed by the party against whom the waiver
was asserted.”). Because the purported extension of the Supplemental Contracts
and Master Purchase Agreement was not in writing, nor signed by the Unit
Owners, there was no waiver of any deadline and both agreements automatically
terminated on February 16, 2011. Thus, the BOD and Dedesma lacked the
apparent authority to modify essential terms of executed Supplemental Contracts.
D. Statute of Frauds
Lastly, the statute of frauds requires a written contract for the sale of real
estate and further “prohibits the oral modification of a contract for the sale of land
under the doctrine of promissory estoppel.” Bradley, 943 So. 2d at 222 (citing
Shore Holdings, Inc. v. Seagate Beach Quarters, Inc., 842 So. 2d 1010, 1012 (Fla.
4th DCA 2003)). The Florida Supreme Court has explained that “the Statute of
Frauds is a legislative prerogative, grounded in a policy judgment that certain
contracts should not be enforced unless supported by written evidence.” DK
Arena, Inc. v. EB Acquisitions I, LLC, 112 So. 3d 85, 93 (Fla. 2013) (citing
Tanenbaum v. Biscayne Osteopathic Hosp., Inc., 190 So. 2d 777, 779 (Fla. 1966)).
Accordingly, “[t]he statute should be strictly construed to prevent the fraud it was
designed to correct, and so long as it can be made to effectuate this purpose, courts
should be reluctant to take cases from its protection.” LaRue v. Kalex Constr. &
Dev., Inc., 97 So. 3d 251, 253 (Fla. 3d DCA 2012) (quoting Yates v. Ball, 181 So.
341, 344 (Fla. 1937)).
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Here, no Unit Owner signed or was made a party to the December 2010
email chain that allegedly extended the Supplemental Contract and Master
Purchase Agreement deadlines. No Unit Owner who executed a Supplemental
Contract prior to the February 16, 2011 date was asked to re-execute their
Supplemental Contract, and Dedesma clearly stated that the requested extension
would not be “official” until the BOD met and voted on a resolution, which did not
occur until April 13, 2011. Accordingly, the statute of frauds was not satisfied and
no enforceable contract was in existence for the First Addendum to modify when
approved by the BOD on April 13, 2011, approximately fifty-six days after the
original Sale Approval deadline expired.
Additionally, any suggestion that partial performance by the parties was
sufficient to remove the December 2010 email extensions and First Addendum
from the purview of the statute of frauds is misplaced. “[B]efore it becomes
proper or necessary to determine whether the facts permit the enforcement of such
a contract, as an exception under the Statute of Frauds, it must first be determined
that” an oral contract exists. Gable v. Miller, 104 So. 2d 358, 360 (Fla. 1958).
Because the BOD and Dedesma lacked the authority to unilaterally modify
essential terms of a Unit Owner’s executed Supplemental Contract, there was no
contract in existence on April 13, 2011, for the BOD and Nemni to modify.
Moreover, the trial court relied primarily on conduct by the BOD, purportedly on
behalf of Unit Owners, to conclude that the Unit Owners partially performed and
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therefore the statute of frauds did not apply. However, such conduct by the BOD
is immaterial and does not illustrate partial performance by Unit Owners because
neither the BOD nor Dedesma was acting as an agent authorized to unilaterally
extend the Supplemental Contracts or Master Purchase Agreement.
V. CONCLUSION
Based on the foregoing reasons, we conclude that the Unit Owners did not
give authority to the BOD and Dedesma, through the Supplemental Contracts, to
take all action reasonably necessary to effectuate a closing under the Master
Purchase Agreement, including the extension of the Sale Approval deadline and
execution of the First Addendum. Accordingly, the Master Purchase Agreement
and executed Supplemental Contracts automatically terminated on February 16,
2011, when the Sale Approval condition of 100 percent Unit Owner consent was
not satisfied.
Reversed and remanded for further proceedings.
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