Gunning v. Equestleader.com, Inc.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
RANDALL GUNNING, individually, )
CASTLE CONSULTING I LTD., INC., a )
Florida corporation; and RIVER OF )
LIFE INTERNATIONAL OUTREACH )
CENTER, INC., a Florida corporation, )
)
Appellants, )
)
v. ) Case No. 2D16-2214
)
EQUESTLEADER.COM, INC., a )
Virginia corporation; and DONALD )
PIERCE, individually and president of )
Equestleader.Com, Inc., )
)
Appellees. )
________________________________ )
Opinion filed October 13, 2017.
Appeal from the Circuit Court for
Pinellas County; Thomas H. Minkoff,
Judge.
Walter E. Smith of Meros, Smith,
Lazzara, Brennan, Brennan & Olney,
P.A., St. Petersburg, for Appellants.
Eric E. Ludin and Amy Ray of Tucker &
Ludin, P.A., St. Petersburg, for
Appellees.
NORTHCUTT, Judge
Equestleader.com, Inc., recovered a judgment for civil trespass damages
against Randall Gunning, Castle Consulting I Ltd, Inc., and River of Life International
Outreach Center, Inc. We reverse because, as a matter of law, none of the appellants
committed a trespass.
This dispute arose from an unorthodox, June 2006 real estate transaction
wherein Gunning purchased real property from Equestleader subject to existing
mortgages. The property consisted of two contiguous lots that shared the same
address in Pinellas Park. Situated on lot 3501 were a stable and a barn. On lot 3508
was a house. The parties' contract provided that Gunning would receive possession
upon the execution of the contract and that Equestleader would "net no proceeds from
the sale." The contract further stated: "Seller authorizes buyer to negotiate with
Wachovia Bank regarding payoff or settlement of account and accepts title subject to
mortgage."
The day after the execution of the sales contract, the parties entered into a
separate agreement under which Equestleader and its president, Donald Pierce, would
furnish consulting services in exchange for $250,000 and a yacht owned by Gunning.
The consulting agreement incorporated by reference the contract for sale of the Pinellas
Park property and also provided that if Gunning successfully negotiated with Wachovia
Bank to reduce the mortgage to less than the amount owed at time of closing on the
contract for sale, Gunning would remit to Equestleader and Pierce half the resulting
savings.
On September 1, 2006, Pierce executed a warranty deed conveying the
property to Gunning. However, he signed the deed in his individual capacity instead of
as president of Equestleader, the property owner. Four years later, on August 31, 2010,
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Gunning's attorney contacted Pierce's attorney in regard to the error in the deed.
Subsequently, Pierce refused to sign a corrected deed as president of Equestleader,
complaining that the mortgages on the property were not current. However, on August
2, 2010, a tax deed had been recorded showing that appellant Castle Consulting had
purchased lot 3501 at a tax sale on July 28, 2010. Gunning testified at trial that he later
purchased lot 3501 from Castle Consulting.
On December 2, 2011, Equestleader filed suit seeking to eject the
occupants from the Pinellas Park property. Pierce later testified that he had personally
gone onto the property and asked the occupants to leave. However, there was no
testimony as to the date this occurred, other than that it was after the error in the
warranty deed was discovered.
Meanwhile, Wachovia Bank, N.A., had obtained a summary final judgment
foreclosing its mortgage on lot 3508 on June 10, 2010. On April 4, 2013, an amended
final summary judgment of foreclosure was entered nunc pro tunc to that date—
Gunning testified at trial that he had made no mortgage payments between late 2008
and 2010. D W Homes purchased the property at a foreclosure sale for $75,500, and
the certificate of title was issued on December 3, 2013. The next day, D W Homes
transferred lot 3508 to appellant River of Life by quitclaim deed. The trial testimony
established that River of Life was a company controlled by Gunning. He testified that D
W Homes had outbid him at the foreclosure sale and that he then had paid $85,000 for
lot 3508.
Following the foreclosure sale, Equestleader dropped its ejectment action
and filed a third amended complaint against Gunning, Castle Consulting, and River of
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Life, claiming damages for civil trespass on both lots 3501 and 3508. The complaint
alleged: "Throughout the time between September 1, 2006 and December 2013 or
January 2014, the Defendants trespassed on the Plaintiff's property, occupying the
property without lawful right or authority and without compensation to the Plaintiff."
After a nonjury trial, the trial court entered judgment for Equestleader. The
court found that "[o]n October 31, 2010, the parties discovered the error with the Deed
and the Plaintiff's consent to the Defendants' occupancy of the properties was revoked."
The court ruled that the use and occupancy of the premises after consent to possession
had been revoked was a trespass. It awarded damages against the three defendants
based on the value of the property, measured by the price the defendants paid
respectively to buy the one lot at the tax sale and to buy the other lot from the winning
bidder in the foreclosure. This was error; the proper measure of damages for a
trespass is the value of the loss of use and enjoyment of or the injury to the land
trespassed upon. Daniel v. Morris, 181 So. 3d 1195, 1199 (Fla. 5th DCA 2015).
However, we need not delve further into this issue or remand for a recalculation of
damages because there was no trespass here to begin with.
Civil trespass to real property occurs when there is an injury to or use of
the land of another by one having no right or authority. Winselman v. Reynolds, 690
So. 2d 1325, 1327 (Fla. 3d DCA 1997). To sue and recover for a trespass, the plaintiff
must have been the owner or rightfully in possession of the land at the time of the
trespass. Vincent v. Hines, 84 So. 614, 616 (Fla. 1920). Neither was the case here.
Gunning became the equitable owner of the property when he and
Equestleader entered into the contract for purchase and sale of the property, and that
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ownership continued notwithstanding the defective execution of the warranty deed. "[A]
contract to sell real property establishes the vendee 'as the beneficial owner of the
property, with the vendor retaining only naked legal title in trust for the vendee.' "
Desmosthenes v. Girard, 955 So. 2d 1189, 1191 (Fla. 3d DCA 2007) (quoting B.W.B.
Corp. v. Muscare, 349 So. 2d 183, 184 (Fla. 3d DCA 1977)). Further, as recited by the
Desmosthenes court:
Thus, when Better Homes contracted in 2002 to sell the unit
at issue to Girard, and certainly when it accepted payment
for that unit and issued the first, albeit defective, warranty
deed to him, Girard became the beneficial or equitable
owner of the unit. This is so even if legal title did not
effectively pass to him by virtue of the first defective warranty
deed.
Id.
Indeed, Equestleader acknowledged and the trial court found that Gunning
was authorized to occupy the property as its equitable owner at least until Equestleader
"revoked" permission for Gunning to do so. But even if Equestleader rightfully could
have unilaterally and extra-judicially revoked the fully executed purchase and sale
transaction, this did not take place until sometime after August 31, 2010, when
Equestleader's attorney was made aware of the defect in the original deed.
By that time, Equestleader had no interest, legal or equitable, in lot 3501;
that property had been conveyed by tax deed to Castle Consulting. See Sullivan v.
Woodward, 582 So. 2d 31, 33 (Fla. 1st DCA 1991). Thereafter, Castle Consulting had
the right to occupy lot 3501 and Equestleader had no right to claim a trespass as to it.
Thus, Castle Consulting's sale of the lot to Gunning was free of any claim by
Equestleader.
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As for lot 3508, it is doubtful that Equestleader even could have asserted
an equity of redemption following the June 2010 foreclosure judgment in favor of
Wachovia. Regardless, even assuming such an interest, it was of no greater gravity
than Gunning's equitable interest in the property, and it could not have given
Equestleader any greater right to occupy the property than Gunning's. And, of course,
any such interest was extinguished when D W Home purchased the property at the
foreclosure sale and obtained a certificate of title. Again, as a matter of law, River of
Life purchased the lot from D W Home free of any interest that might have been claimed
by Equestleader.
It is clear, then, that during the timeframe at issue (1) none of the
defendants occupied the subject property without authority and (2) Equestleader had no
interest in the property sufficient to support a trespass claim. Accordingly, we reverse
the judgment and remand the case to the trial court, which shall enter judgment for the
defendants.
Reversed and remanded with directions.
SALARIO and ROTHSTEIN-YOUAKIM, JJ., Concur.
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