All Seasons Condo. Ass'n, Inc. v. Patrician Hotel, LLC

• Decision Date: 24 April 2019
• Docket Number: Nos. 3D17-132 & 3D17-130,s. 3D17-132 & 3D17-130
• Parties: ALL SEASONS CONDOMINIUM ASSOCIATION, INC., Pedro Dedesma a/k/a Peter Dedesma, Manuel De La Morena, Emilio Gomez, and John Sanchez, et al., Appellants, v. PATRICIAN HOTEL, LLC, and All Seasons Suites, LLC, Appellees.
• Court: Florida District Court of Appeals

274 So.3d 438

ALL SEASONS CONDOMINIUM ASSOCIATION, INC., Pedro Dedesma a/k/a Peter Dedesma, Manuel De La Morena, Emilio Gomez, and John Sanchez, et al., Appellants,

v.PATRICIAN HOTEL, LLC, and All Seasons Suites, LLC, Appellees.

Nos. 3D17-132 & 3D17-130

District Court of Appeal of Florida, Third District.

Opinion filed April 24, 2019.

Rehearing Denied June 06, 2019

Fowler White Burnett, P.A., and Alice K. Sum, Miami; Dorta & Ortega, P.A., and Omar Ortega and Rosdaisy Rodriguez, Coral Gables, 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.

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:

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 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 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 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 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 ...