Alter v. Finesmith

• Decision Date: 15 October 1968
• Docket Number: No. 67--889,67--889
• Citation: 214 So.2d 732
• Parties: Frank ALTER, Appellant, v. Max FINESMITH, David Easton and Adeline Uydess, as Executors of the Estate of Harry Uydess, Deceased, et al., Appellees.
• Court: Florida District Court of Appeals

Page 732

214 So.2d 732

Frank ALTER, Appellant, v. Max FINESMITH, David Easton and Adeline Uydess, as Executors of the Estate of Harry Uydess, Deceased, et al., Appellees.

No. 67--889.

District Court of Appeal of Florida, Third District.

Oct. 15, 1968.

Rehearing Denied Nov. 5, 1968.

Milton E. Grusmark, Irwin Oster, Miami Beach, for appellant.

Broad & Cassel and Lewis Horwitz, Miami Beach, for appellees.

Before CHARLES CARROLL, C.J., and PEARSON and BARKDULL, JJ.

PEARSON, Judge.

The subjects of this appeal are (1) a judgment which found that the plaintiff-appellees were entitled to an accounting because of fraud, and (2) the subsequent judgment on accounting. The action arose from a real estate transaction in which the defendant-appellant was the real estate agent and also one of a group of individuals who were purchasing the property.

The parties differ widely in their statements of the facts revealed by the record. We find it convenient to adopt the statement of facts set out by the trial judge in the judgment. We shall first quote the trial judge's statement and afterwards, in a discussion of the points involved, set forth the view of the facts urged by the appellant.

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'The evidence reveals, and I so find, that defendant (appellant) at all material times was a real estate broker in Dade County, Florida. Plaintiffs (appellees), with the exception of plaintiff MALAMUDE who originally was a defendant, are all residents of New York, and all plaintiffs are engaged in various individual occupations, none of which was or is the business of buying and selling real estate. Plaintiffs were and are well acquainted with each other, most of them being relatives of the plaintiff MAX FINESMITH. Plaintiff MAX FINESMITH and CAHN, who were generally spokesman for plaintiffs, knew defendant well since boyhood.

'In or about March, 1958, plaintiffs MAX FINESMITH and JACK BRAVERMAN were in Miami on a vacation, when during the course of their visiting with defendant, he urged the purchase of the unimproved land described in the complaint by them and himself stating it could be sold soon at a profit. It was intended that all share profits, losses, and control. Defendant informed those plaintiffs that the owner of the land was a DR. LEO GROSSMAN and the purchase price was approximately $277,000.00. Plaintiffs MAX FINESMITH and BRAVERMAN informed defendant they would discuss the proposed venture with others in New York to form a group for the purchase.

'Plaintiffs MAX FINESMITH and BRAVERMAN returned to New York and related to the other plaintiffs, relatives and friends of plaintiff MAX FINESMITH, their conversations with defendant. Defendant's representations concerning who the seller of the land was and the purchase price of approximately $277,000.00 were transmitted to the other plaintiffs in New York. Defendant had phone conversations between Miami and New York with plaintiff MORTON CAHN during which defendant made the same representations to plaintiff CAHN as he had made to plaintiffs MAX FINESMITH and BRAVERMAN. As a result of defendant's representations, plaintiffs agreed to purchase the land for $277,000.00.

'The closing of the sale of the land took place in June, 1958, at the law offices of Lawrence E. Hoffman in Miami Beach. Instead of there being one sale from DR. LEO GROSSMAN, the owner of the property, to plaintiffs and defendant, the joint adventurers, for approximately $210,00.00 there were, in form, two sales; one from DR. LEO GROSSMAN to SAUL LESTER, defendant's father-in-law, for approximately $210,000.00, and the other from LESTER to plaintiffs and defendant for approximately $277,000.00. The closing of the two sales was simultaneous.

'In answer to plaintiffs' interrogatories, defendant stated that the purchase price of the land on the sale from GROSSMAN to his father-in-law was about $210,000.00, and the source of the cash which his father-in-law used to pay LEO GROSSMAN at the closing of the sale of the land from GROSSMAN to his father-in-law was 'most of the funds came from the simultaneous closings.'

'Upon plaintiffs' request for admissions, defendant admitted, among other things, the following:

1. The purchase price of the land to the parties in this suit was $276,975.00.

2. There was a simultaneous closing of the sale of the land from LEO GROSSMAN to defendant's father-in-law on the one hand, and from defendant's father-in-law to the parties in this suit on the other hand.

3. Lawrence E. Hoffman at the simultaneous closing of the sales was the attorney for defendant's father-in-law and also for the parties in this suit.

4. Lawrence E. Hoffman was defendant's attorney in other matters unrelated to the matters involved in this suit and unrelated to the land described in the complaint in this suit.

5. There was no consideration paid by defendant to his father-in-law for the assignment from his father-in-law to defendant of the mortgage for $48,070.55.

6. Defendant negotiated on behalf of his father-in-law the sale of the above described land from LEO GROSSMAN to his father-in-law.

7. Defendant negotiated the sale of the above described land from his father-in-law to the parties in this suit.

'I find as a fact that the source of the cash which defendant's father-in-law used to pay the seller of the property, LEO GROSSMAN, at the closing of the sale from GROSSMAN to defendant's father-in-law came from the plaintiffs, and actually defendant made no investment in the land. I also find that defendant received all of the proceeds principal and interest, of the note and unrecorded mortgage for $48,070.55. I find that defendant never disclosed to plaintiffs that the purchase price of the property from the owner, LEO GROSSMAN, was approximately $210,000.00 rather than approximately $277,000.00 which defendant had represented it to be to plaintiffs.

'I find that defendant did not disclose to plaintiffs that he had been assigned the note and unrecorded mortgage of $48,070.55 without consideration, and that he ultimately received the entire principal and interest on this note and unrecorded mortgage.

'I find that plaintiffs and defendant were joint adventurers in the transaction of purchase and sale of the land described in the complaint, and defendant owed plaintiffs a duty to disclose to them all material facts in all transactions relating to the land, and his failure to disclose to them that the selling price from LEO GROSSMAN was $210,000.00 was a breach of defendant's fiduciary duty to plaintiffs, and defendant's failure to disclose to plaintiffs that he received, without consideration, the note and unrecorded mortgage of $48,070.55, and ultimately received the proceeds, including principal and interest, was likewise a breach of his fiduciary duty to plaintiffs.

'I find that plaintiffs did not know those salient facts concerning the transaction and had they known the truth, they would not have engaged in the transaction except upon a basis of a selling price to the joint adventurers of approximately $210,000.00, approximately $67,000.00 less than the purchase price which plaintiffs actually paid.

'The parties ultimately sold the land to Urban & Suburban Homes, Inc. for $450,000.00. Defendant secretly received $35,000.00 as part of $45,000.00 broker's fees on such sale, but subsequently delivered to plaintiffs $10,000.00, keeping for himself $25,000.00. Defendant had not disclosed to plaintiffs that he was receiving part of the broker's fees on this sale, but, on the contrary, represented that other brokers were receiving all the fees. In fact, the other brokers received approximately $10,000.00 instead of the $45,000.00 represented by defendant to the plaintiffs that the other brokers were receiving.'

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'The Board of Public Instruction of Brevard County ultimately purchased a portion of the land described in the complaint from Urban & Suburban Homes, Inc. for approximately $143,000.00.'

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'I find that defendant did not disclose to plaintiffs that the Board of Public Instruction of Brevard County was contemplating purchasing a portion of the land prior to the parties selling the land to Urban & Suburgan (sic) Homes, Inc., and defendant did not disclose to plaintiffs that subsequent to the purchase by the Board of Public Instruction from Urban & Suburban Homes, Inc., he had claimed a broker's fee as a result of that sale. I find that defendant had a fiduciary duty to disclose such facts to plaintiffs, which they did not know, and his failure to do so was a breach of said fiduciary duty. If, in fact, he received a broker's fee as a result of the sale of a portion of the land from Urban & Suburban Homes, Inc. to the Board of Public Instruction of Brevard County, he is accountable to plaintiffs for such sums he may have received.

'I conclude from all the facts that there was a fiduciary relationship between plaintiffs and defendant; that defendant breached his fiduciary duty to plaintiffs; and that defendant is required to account to plaintiffs for the difference between the price at which the land described in the complaint was sold by the owner, LEO GROSSMAN, approximately $210,000.00, and the amount paid by the plaintiffs, approximately $277,000.00; that defendant is required to account to plaintiffs for all principal and interest obtained by him on the note and unrecorded mortgage for $48,070.55, except any portion which may be included in the accounting of the true selling price of the land; that defendant is required to account to plaintiffs for all brokerage fees obtained by him as a result of any sales of the...