Bermil Corp. v. Sawyer, s. 76-521
| Decision Date | 06 December 1977 |
| Docket Number | Nos. 76-521,76-657 and 76-658,s. 76-521 |
| Citation | 353 So.2d 579 |
| Parties | BERMIL CORPORATION, a Florida Corporation, Edward Leeds, Norman Morris and C.C.C. Investment Corporation, Appellants, v. Kay SAWYER d/b/a United Mortgage Company, Appellee. |
| Court | Florida District Court of Appeals |
Lapidus & Hollander and Richard L. Lapidus, Miami, for Bermil Corp.
Sibley, Giblin, Levenson & Glaser and Irving B. Levenson, Miami Beach, for Leeds, Morris & CCC Investment, appellants.
Male, Bloom, Bodne, Kuperstein & Eisenberg, Miami and Michael J. Fingar, Miami Lakes, for appellee.
Before HENDRY, C. J., and PEARSON and NATHAN, JJ.
These appeals, consolidated for all appellate purposes, are taken from three final judgments rendered pursuant to jury verdicts. The first judgment was rendered in favor of appellee/plaintiff Kay Sawyer and against appellant/defendant Bermil Corporation on a cause of action based upon a breach of a brokerage contract. Judgment number two was rendered in favor of Sawyer and against appellant/defendant Edward Leeds for the tortious interference with the above brokerage contract. The third and final judgment appealed from was rendered in favor of Bermil Corporation, as appellee/cross-plaintiff, and against appellants/cross-defendants Leeds, Norman Morris and C.C.C. Investment Corporation for damages based upon the jury's determination that a certain real property transaction entered into between the parties and designated by them as a sale with option to repurchase was, in reality, a device to disguise a usurious loan.
The salient facts, taken in the light most favorable to the various appellees, are as follows: on August 28, 1973, Bermil Corporation defaulted on a first mortgage which encumbered its Cypress Plaza Shopping Center in Pompano Beach, Florida. Unable to forestall the New York mortgagee any longer, Bermil Corporation, acting through its president, Milton Stein, began approaching various mortgage brokers for the needed money to satisfy the default.
On or about December 7, 1973, Stein telephoned Kay Sawyer, a Dade County mortgage broker. That same day, Stein and Ms. Sawyer met in the latter's office at which time Stein signed a loan application. In pertinent part, the application provided that Stein agreed to pay Sawyer a $6,000.00 fee if she could obtain a $60,000.00 loan for him at the rate of 15% interest for 5 years. Later that day, Ms. Sawyer began her quest, burdened by the reality that Stein's financial difficulties, including the "failure" of other shopping centers owned by his corporation, would make the task difficult. She did, however, contact Edward Leeds, who demonstrated a serious interest in making the loan, upon the proper security being furnished.
A few days passed between the initial conversation of Leeds and Sawyer and a second conversation wherein Leeds agreed to loan the money at the aforementioned rate of interest secured by a mortgage on the property. Pursuant to this second conversation, the mortgage was to be taken in the name of C.C.C. Investment Corporation, a Florida corporation that had paid no income taxes since 1969; had held no director's or stockholder's meetings; and had been utilized to pay the personal debts of its sole stockholder, Leed's wife. Relying upon Leed's representation that he would fund the mortgage, Ms. Sawyer prepared a note and mortgage and recorded same.
On December 14, 1973, the resident agent of Bermil Corporation received a complaint for foreclosure, together with notice, stating that on December 21, 1973, a hearing was scheduled for the appointment of a receiver for the Cypress Plaza Shopping Center, predicated upon the failure of Bermil Corporation to pay the August, 1973, mortgage payment. According to the terms of the mortgage, upon default, the mortgagee had the right to accelerate the entire debt, which at that time, was nearly $2,000,000.00.
On December 19, 1973, two days prior to the receivership hearing (and after the note and mortgage had been recorded), a meeting was held in Ms. Sawyer's office attended by Stein, Leeds and Sawyer. After preliminary talks, Leeds put a check on the table for $57,000.00. When asked by Ms. Sawyer why the check was not in the heretofore agreed upon amount of $60,000.00, Leeds responded by saying that he would give her the $3,000.00 balance and told her not to worry about it. The tender was refused by Sawyer on the grounds that (1) the check had too many endorsements on its back and that (2) she was an "ethical broker" and "sometimes it (the funding of a mortgage note by a lender in an amount less than the actual face value of the note) could be a usurious transaction" resulting in the appearance "that there had been a kickback of some kind."
The next evening, with the receivership hearing the following day, Leeds telephoned Stein and told him that he would not fund the mortgage. Instead, Leeds suggested that for the same $60,000.00, he would buy 40% of the shopping center. On December 21, 1973, the following morning, Leeds and Stein met, at which time Leeds insisted upon being given a deed to 40% interest in the property. Having until noon of that day to make payment on the first mortgage, Stein agreed to the deed.
The terms of the transaction were as follows: Stein deeded over to C.C.C. Investment Corporation the 40% interest in the shopping center in exchange for $60,000.00, with an option to repurchase same at the end of one year for $100,000.00. Prior to the receivership hearing, upon negotiation with the mortgagee's attorney, $54,000.00 was paid to satisfy the default in the mortgage. Leeds kept the remaining $6,000.00 which had originally been earmarked as Sawyer's brokerage commission. As of the time of trial, Sawyer had not been paid for her efforts.
At the time of the transaction, the net income generated by the shopping center was over $50,000.00 per year. The stores at the shopping center were generally rented with long term leases and the revenue generated by said leases were constant. At trial, the value of the equity in the property was estimated at between $500,000.00 and $750,000.00.
Subsequent to the aforedescribed transaction, on December 25, 1973, Leeds approached Norman Morris about purchasing half of his 40% interest. Before that date, Morris was neither involved in the above transaction, nor had he known of Leed's prior representation to loan Stein the $60,000.00. Morris did testify at trial that he was aware of Stein's financial difficulty at the time that he became Leed's partner and that his interest in the equity was purchased well below its probable value.
After a lengthy and complex trial, a jury returned a verdict in favor of Ms. Sawyer and against Bermil Corporation (Stein) for her brokerage commission, assessing damages at $6,000.00, the amount of the commission. In addition, Sawyer was awarded a favorable verdict against Leeds for the tortious interference with the Sawyer-Bermil Corporation brokerage contract. Damages were assessed by the jury in the like amount of $6,000.00. Finally, the jury returned a verdict in favor of Bermil Corporation and against Leeds, Morris and C.C.C. Investment Corporation on the former's cross-claim, finding that the sale-option transaction was, in reality, a device to cloth a usurious transaction. Damages in the amount of $73,000.00 were assessed by the jury.
From these three final judgments, this consolidated appeal follows.
Initially, it must be emphasized that all three final judgments under attack were rendered pursuant to a jury verdict. As such, certain appellate principles of law must be emphasized and cannot, sub judice, be understated. Those principles include the caveat that the function of an appellate court is not to substitute its judgment for that of the jury on disputed...
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