875 So.2d 375 (Fla. 2004), SC02-2491, St. Joe Corp. v. McIver

Docket Nº:SC02-2491.
Citation:875 So.2d 375, 29 Fla. L. Weekly S 53
Opinion Judge:The opinion of the court was delivered by: Cantero, J.
Party Name:ST. JOE CORPORATION, f/k/a St. Joe Paper Company, Petitioner, v. H. Bruce McIVER, Respondent.
Attorney:Kenneth G. Oertel and C. Anthony Cleveland of Oertel, Fernandez & Cole,
Case Date:February 05, 2004
Court:Supreme Court of Florida
 
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Page 375

875 So.2d 375 (Fla. 2004)

29 Fla. L. Weekly S 53

ST. JOE CORPORATION, f/k/a St. Joe Paper Company, Petitioner,

v.

H. Bruce McIVER, Respondent.

No. SC02-2491.

Supreme Court of Florida.

February 5, 2004.

Rehearing Denied June 2, 2004.

Page 376

Kenneth G. Oertel and C. Anthony Cleveland of Oertel, Fernandez & Cole, P.A., Tallahassee, FL, for Petitioner.

Page 377

Law Offices of R. Stuart Huff, Coral Gables, FL; Ben H. Wilkinson of Pennington, Moore, Wilkinson, Bell & Dunbar, P.A., Tallahassee, FL; and Adam Lawrence of Lawrence & Daniels, Miami, FL, for Respondent.

CANTERO, J.

We consider whether a real estate broker can ever be entitled to a commission under an oral brokerage agreement where the broker, with the seller's consent, helped negotiate not a sale, but a condemnation of the property. In the decision below, the First District Court of Appeal held that, under certain circumstances, a condemnation could constitute a sale for purposes of a brokerage commission. See McIver v. St. Joe Corp., 828 So.2d 394, 396 (Fla. 1st DCA 2002). This holding expressly and directly conflicts with Dauer v. Pichowski, 413 So.2d 62, 63-64 (Fla. 2d DCA 1982), which held that a condemnation proceeding can never constitute a sale for such purposes. We accepted jurisdiction to resolve the conflict. See art. V, § 3(b)(3), Fla. Const. For the reasons we explain below, we approve the result of the First District's opinion. Contrary to the district court's reasoning, however, we hold that general contract principles should apply to determine whether, in a particular case, the seller and the broker agreed to pursue condemnation as an alternative to a sale.

I. FACTS

The trial court in this case granted summary judgment in favor of the defendant, petitioner St. Joe Corporation. Therefore, we must examine the record in the light most favorable to the respondent, H. Bruce McIver, as the non-moving party. See, e.g., Markowitz v. Helen Homes of Kendall Corp., 826 So.2d 256, 259 (Fla.2002). We recognize that some of these facts may be disputed, but at this point in the litigation we must accept McIver's version as true.

McIver had long represented St. Joe in real estate matters, often on a handshake. In 1988, he again orally contracted with St. Joe to provide consulting services and to act as St. Joe's broker for the sale of a 600-acre parcel of environmentally sensitive land known as "Topsail." Under the oral agreement, St. Joe would pay McIver two percent of the sale price. At the time, although the parties contemplated that the State of Florida would purchase the property through its Conservation and Recreation Lands (CARL) program, apparently neither party mentioned the possibility of a condemnation.

Negotiations with the State continued for several years. At various points, St. Joe confirmed to the State that McIver was its agent for purposes of the sale of Topsail and would be entitled to a two percent commission.

McIver's efforts significantly increased the property's value. In 1989, due in part to his experience with the CARL process and his efforts on St. Joe's behalf, the State placed Topsail on its CARL acquisition list, which is a prerequisite to the State's purchase of such property. McIver's continuing efforts caused Topsail to gradually move up the list from seventeenth in 1989 to first in 1994.

Despite the property's movement to the top of the CARL list, negotiations with the State stalled in 1994 due to differences over the purchase price. The State offered $25.7 million, but St. Joe wanted no less than $50 million. St. Joe also did not receive an acceptable offer from any other potential purchaser.

According to McIver, at this point he proposed to St. Joe the idea of condemnation to break the impasse. McIver knew

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that before condemnation, the State bases its purchase offer on the property's then-existing zoning, but after condemnation proceedings begin the State could base its offer on the property's highest and best use, regardless of current zoning. That difference was significant for the Topsail property. Although originally the property had been zoned for multiple units per acre, in 1993 the State directed Walton County to amend its comprehensive plan to downzone Topsail to one unit per every five acres. McIver knew that condemnation proceedings would allow St. Joe to negotiate a price based on the earlier, higher-density zoning. McIver also knew that the State's practice was not to condemn CARL lands unless the landowner agreed.

McIver talked to St. Joe about several ways to break the impasse, including convincing the State to condemn the property. St. Joe's Chief Executive Officer, Jacob Belin, told McIver to "see what [he] could get done" to increase the property's value.

In accordance with St. Joe's direction, McIver proposed to the State that the parties proceed by condemnation. In the summer of 1994, the State asked McIver to confirm with St. Joe that it was amenable to a "friendly condemnation." 1 McIver explained the process to Belin, who directed McIver to "tell them to condemn it." McIver communicated St. Joe's agreement to the State.

The State initiated eminent domain proceedings in September 1994. Although St. Joe privately consented to the proceedings, formally, through its pleadings, it objected, contesting the issue of public purpose for the taking. Although at first blush formal opposition to condemnation proceedings appears inconsistent with consent, testimony showed that such opposition was sometimes used as a bargaining tool to negotiate a favorable...

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