Third District Court of Appeal
Third District Court of Appeal ()

The Third District Court of Appeal reversed a trial court decision on a derailed $4.5 million real estate deal that left the seller and would-be buyer fighting over nearly $700,000 in deposits.

After more than a decade of legal wrangling, the appeals court sided Wednesday with seller Francis J. Dirico against mobile home park developer Redland Estates Inc. in a case that centered on whether ambiguity in their contract prevented a summary judgment.

“Redland is decidedly disappointed with this unexpected result,” according to Miami attorney Benedict Kuehne, who said his client was considering several options, including a request for reconsideration and Florida Supreme Court review, to reinstate the trial court judgment in its favor. “The evidence at trial showed that the seller and the seller’s lawyer schemed to try to come up with addenda that didn’t make it clear they would keep the deposits.”

Dirico and Redland Estates were in talks in October 2002 over a 92-acre property priced at $3.8 million with a $200,000 deposit. An additional $38,000 deposit followed on April 20, 2003.

But the deal hit its first snag that month when the contract was amended to extend the closing date, push the sale price to $4.3 million and turn over $238,000 in deposits to Dirico as payment for the delay. The addendum also included a $250,000 nonrefundable deposit to be held in escrow.

But the changes didn’t stop there. A third update to the contract two months later again increased the purchase price—this time to $4.5 million—and required an additional $200,000 nonrefundable deposit.

The new terms gave Dirico yet another compensatory payment, taken from the first nonrefundable deposit held in escrow.

When the time came to finalize the deal, the deposits credited on each side’s closing statement were hundreds of thousands of dollars apart. Redland Estates wanted credit for $688,000, but Dirico’s documents reflected only $200,000. Redland refused to sign the deal. Dirico kept the deposits and sent a letter of default, and Redland filed suit.

Miami-Dade Circuit Judge David Miller sided with Redland Estates during trial, agreeing the terms of the contract were ambiguous and denying Dirico a summary judgment.

The Third District Court disagreed.

The “lower court believed that one reasonable interpretation of the contract was that the consideration given by the buyer for the second and third extensions of time was not the money contained in the deposits, but instead the right of the seller to personally hold and access the money prior to closing rather than have the deposits held in escrow,” Judge Thomas Logue wrote for a unanimous panel. Judges Leslie Rothenberg and Vance Salter concurred. “When the contract is read as a single document there is no ambiguity on this point.”

Elliot Scherker, Brigid Cech Samole and Jay Yagoda of Greenberg Traurig represented Dirico in the case centering on whether the contract conveyed the full intent of both parties.

“We’re very gratified that the Third District Court of Appeal accepted the validity of our arguments,” Scherker said.

Redland Estates’ legal team included David Haber and David Podein of David B. Haber P.A. and Kuehne, Susan Dmitrovsky and Michael Davis from Benedict P. Kuehne P.A.

When the dust settled, the appeals court found the amended contract “plainly state that the moneys previously held as deposits in escrow became payments” to Dirico as consideration for allowing the buyer more time to close.

“There is no reason why the expressions ‘released and paid to the seller as consideration for this extension’ and ‘as a payment for the extension of this contract’ should be given any meaning other than their plain and ordinary sense: the funds that were once deposits to guarantee performance became payments for the extensions of the contract,” Logue wrote.

But after an 11-year fight, Redland is not willing to walk away.

“It’s not finished yet,” Kuehne said.