Allegro At Boynton Beach, L. L.C. v. Pearson

• Decision Date: 27 November 2019
• Docket Number: No. 4D18-3387,4D18-3387
• Citation: 287 So.3d 592
• Parties: The ALLEGRO AT BOYNTON BEACH, L.L.C., a Florida Limited Liability Company, Appellant, v. C. Bruce PEARSON, an Individual, and Olson Land Partners, LLC, Appellees.
• Court: Florida District Court of Appeals

287 So.3d 592

The ALLEGRO AT BOYNTON BEACH, L.L.C., a Florida Limited Liability Company, Appellant,

v.C. Bruce PEARSON, an Individual, and Olson Land Partners, LLC, Appellees.

No. 4D18-3387

District Court of Appeal of Florida, Fourth District.

[November 27, 2019]

Wade McK. Hampton of Duss, Kenney, Safer, Hampton & Joos, P.A., Jacksonville, for appellant.

Ronald M. Gaché and Scott A. Simon of Shapiro, Fishman & Gaché, LLP, Boca Raton, for appellee C. Bruce Pearson.

Ciklin, J.

In the second appeal pertaining to this litigation, the Allegro at Boynton Beach, LLC ("Allegro") appeals a final judgment entered in favor of the defendant below, C. Bruce Pearson ("the Seller"). The final judgment incorporates an order denying Allegro's motion for summary judgment and granting the Seller's renewed cross motion for summary judgment. We reject both of the issues Allegro raises on appeal and we affirm.

I. FACTS

This appeal arises from an action involving a contractual right of first refusal to purchase real property ("the ROFR"). The ROFR was assigned to Allegro, which operates a senior housing community on an adjacent parcel of land.

Language in the contract governing the ROFR provides that, prior to the Seller's transfer of the real property (the "Refusal Property"), the Seller shall deliver a copy of the third party sale contract to Allegro. Allegro "shall have the right to elect, within ten (10) days after its receipt of the [third party sale contract], to purchase the Refusal Property at the same price and upon the same terms and conditions as those contained in the [third party sale contract] by giving written notice to Seller within the ten (10) day period."

The contract also provides that notices shall be delivered by "mail, personal delivery or electronic media" and that "[a]ny notice, document or item delivered to or received by an attorney ... representing a party will be as effective as if delivered to or by that party." Further, "[i]f for any reason ... Seller fails, refuses or neglects to perform this Contract, [Allegro] may choose to receive a return of [Allegro's] deposit... or to seek specific performance...."

The Seller first found a buyer for the Refusal Property, Cameron General Contractors, Inc., in September 2013 for the sale price of $2.5 million. As it was permitted to do, Allegro exercised its ROFR to purchase the property under the same terms and conditions as the Cameron Contract.

In September 2014, Allegro terminated its contract to purchase the Refusal Property, stating that "the current development environment in Palm Beach County and in Boynton Beach in particular makes the likely path of any approval process of the [Refusal] Property extremely lengthy as well as both time and cost prohibitive," and demanded return of its earnest money. Litigation ensued and ended in settlement without the sale of the Refusal Property.

Thereafter, in May 2015, the Seller procured yet another buyer and entered into a contract with Olson Land Partners, LLC ("Olson") for $3.75 million. On June 12 and 24, 2015, Allegro demanded a copy of the tentative contract with Olson pursuant to the terms of the ROFR (the "Olson Contract"). The Seller advised that he would not forward the contract and that it was the Seller's "position that the right of first refusal was effectively terminated upon Allegro's decline last September to close on the last contract they had on the subject property."

Two days later, in July 2015, Allegro filed suit, alleging the following counts and seeking the following remedies: (I) breach of contract; (II) declaratory judgment that the ROFR is valid, binding, and enforceable, that the Seller is in breach, and that Allegro is entitled to enforce the ROFR; (III) injunctive relief to compel the Seller to perform under the ROFR, provide a copy of the Olson contract to Allegro, and comply with the ROFR; and (IV) specific performance: "judgment requiring the [Seller] to perform the ROFR ...."

Allegro then received the Olson Contract through counsel as an attachment to Olson's motion to intervene filed on December 23, 2015 and through document production from the Seller on January 8, 2016.

The Seller asserted several counterclaims against Allegro, including a counterclaim for declaratory relief seeking judgment finding that the ROFR is no longer in effect based on Allegro's receipt of the Olson Contract and failure to timely exercise its rights. In support of his claims, the Seller pointed out that Allegro received a copy of the Olson Contract through litigation and "failed to timely exercise any rights it might still have under the ROFR." The Seller attached a copy of the Olson Contract to his answer, affirmative defenses, and counterclaims.

Allegro moved for partial summary judgment on counts I and II and the Seller moved for summary judgment on all of his counts. The trial court denied the Seller's motion for summary judgment but granted Allegro's motion for summary judgment. In ruling on the motions, the trial court found that the ROFR remains in effect, that the Seller anticipatorily breached the ROFR in his letter stating his position that the ROFR was effectively terminated, and that, because of the anticipatory breach, "the Court need not reach Seller's argument that the Olson Agreement was delivered in accordance with the ROFR during discovery."

Thereafter, Allegro filed a "Motion for Entry of Final Judgment of Specific Performance Upon Election of Remedy," seeking to have the trial court direct the Seller to deliver the Olson Contract pursuant to the terms of the ROFR. As an exhibit to the motion, Allegro attached a revised version of the Olson Contract that substitutes Allegro's name for Olson's.

The trial court denied Allegro's motion without explanation. It granted a motion for summary judgment filed by Olson, determining that Allegro made an election of remedies when it moved for recovery on breach of the ROFR, and, therefore, Allegro may not seek specific performance. The first appeal ensued.

Allegro's First Appeal

On appeal, in Allegro at Boynton Beach, L.L.C. v. Pearson , 227 So. 3d 1288, 1289 (Fla. 4th DCA 2017), this court ultimately determined that Allegro did not make an election of remedies that prevented it from seeking specific performance, and also determined as follows:

Two days [after the entry of the order on the parties' motions for summary judgment], in an attempt to evade Allegro's pursuit of its right of first refusal, [Olson] terminated the first agreement to purchase the parcel, and then signed a new agreement with the Seller to purchase the same parcel—this time at a considerably higher purchase price with a shortened inspection period. The Seller delivered the new agreement to Allegro giving it ten days to exercise its right of first refusal.

.... When an owner enters into a contract for sale, a pre-existing right of first refusal is "converted into an irrevocable option to purchase." Vorpe v. Key Island, Inc. , 374 So. 2d 1035, 1037 (Fla. 2d DCA 1979) ; see 1 Williston on Contracts, §§ 5:15, 5:16, 5:18 (4th ed. May 2017). Once a holder's right of first refusal ripens into an option, the option is not affected by termination of the underlying contract. Vorpe , 374 So. 2d at 1037 ; see alsoKing v. Hall , 306 So. 2d 171, 173 (Fla. 1st DCA 1975).

Here, once the Seller entered into the purchase agreement with [Olson], Allegro's right of first refusal was converted into an irrevocable option to purchase. [Olson]'s subsequent termination of the purchase agreement did not affect Allegro's option. The trial court erred in finding that the termination of the purchase agreement divested Allegro of its option to exercise its right of first refusal.

We reverse the trial court's grant of summary judgment to [Olson] and remand for further proceedings.

Id. at 1289-91. In a footnote, this court explained:

We find no error in the denial of Allegro's motion [seeking specific performance]. The order granting Allegro's motion for summary judgment established only that the Seller breached the parties' agreement. If Allegro chooses to pursue the remedy of specific performance, it bears the evidentiary burden of establishing its entitlement to this equitable remedy. See Sunbank, N.A. v. Retirement Facility at Palm–Aire, Ltd. , 698 So. 2d 392 (Fla. 4th DCA 1997).

Id. at 1289 n.1.

Following the appeal, Allegro filed a "Motion for Summary Judgment as to Plaintiff's Entitlement to the Remedy of Specific Performance." Allegro sought "the entry of summary judgment of specific performance as a matter of law, requiring Pearson to perform under the Original Contract and ROFR, by delivering the Olson [Contract] to Allegro...."

The Seller then filed a renewed cross motion for final summary judgment on counts III and IV of Allegro's complaint (injunctive relief to compel the Seller to perform under ROFR by providing a copy of the Olson Contract and specific performance) and on his counterclaim for declaratory judgment. Therein, he asserted that Allegro's request for an order requiring that he deliver the Olson contract was moot because he had, on several occasions, previously delivered the contract and Allegro repeatedly failed to exercise the ROFR.

After a hearing, the trial court entered an order denying Allegro's motion and granting the Seller's cross motion, reasoning as follows:

The Court finds that [the Seller] delivered a copy of the [Olson] Contract on January 8, 2016 , when [the Seller]'s attorneys produced documents in response to discovery. That same day, Allegro's attorneys acknowledged receipt of that document production. Additionally, on January 25, 2016, when filing the Amended Answer, Affirmative Defenses and Counterclaim delivered another copy of the Olson Contract when attaching it as an exhibit thereto.

* * * *

The court finds that [the Seller] has satisfied the delivery requirement under the ROFR by providing Allegro with a copy of the Olson Contract, both as part of its document production and as an exhibit

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