Biondo v. Powers

• Decision Date: 20 October 1999
• Docket Number: No. 98-3286.,98-3286.
• Citation: 743 So.2d 161
• Parties: John BIONDO, Appellant, v. Althea A. POWERS, et al., Appellee.
• Court: Florida District Court of Appeals

743 So.2d 161

John BIONDO, Appellant, v.Althea A. POWERS, et al., Appellee.

No. 98-3286.

District Court of Appeal of Florida, Fourth District.

October 20, 1999.

George P. Ord of George P. Ord, P.A., Palm Beach, for appellant.

Steven Goldberg and Randy Ellison, West Palm Beach, for appelleeAlthea A. Powers.

POLEN, J.

John Biondo timely appeals from a final judgment which ordered partition and sale of the property he jointly owned with Althea Powers.The final judgment distributed the sale proceeds between the parties in proportion to the amount of their court-determined investments.Of the five points he raises on appeal, we reverse only on one.We hold that the trial court erred in misallocating the proceeds of the partition sale.

Facts

This appeal stems from what turned out to be an acrimonious relationship between Biondo and Powers.While the two were dating, they purchased real property in Palm Beach for roughly $650,000.The record reflects that the parties, when they purchased the property, intended to quickly sell it for profit.

Of the total purchase amount, they paid $350,000 via a purchase money mortgage held by the seller.The approximately $268,500+ which was due at closing was paid by both parties in equal proportions (50%/50%).

The deed given by the seller at closing named only Biondo as the grantee.At closing, however, Biondo executed a handwritten note which stated,

Rec'd this 18th day of Dec. 1990 $134,296.28 from Althea A. Powers toward purchase of 224 Barton.Any and all monies received from sale of said property to be divided equally prorated as to invested amounts paid at closing this day.

Powers also signed this note.

Powers subsequently paid off the balance due on the mortgage.It is undisputed that the monies she laid out for expenses associated with the property, including taxes and insurance, exceeded those paid by Biondo.On the same day Powers paid off the mortgage, Biondo executed a quit-claim deed of the property to himself and Powers as joint tenants with rights of survivorship.The deed was later recorded.

After Powers consulted with an attorney, both parties decided to execute and record a quitclaim deed from Biondo and Powers, as joint tenants with rights of survivorship, to Biondo and Powers, as tenants in common.Powers, through her attorney, then prepared a note running from Biondo to Powers in the amount of $350,000 bearing interest at 6.5% per annum, payable in five years or on prior sale of the property.She also prepared a mortgage on Biondo's interest in the property from Biondo to Powers to secure payment of the note.Biondo executed both documents.Subsequently, Powers made additional payments for various expenses associated with the property.

In July, 1997, Powers sued Biondo, among other things, to foreclose on the note and mortgage and to partition the property.She claimed Biondo owed her $491,575 under the mortgage.She claimed special equity in the property based on certain judgments, taxes, and insurance she paid, as well as repairs that she made, on same.

Biondo filed a counterclaim in which he alleged that the $350,000 amount of the note and mortgage given to Powers was a mistake.He alleged that half of this amount represented her share of the obligations on the property.He requested reformation of the mortgage deed and promissory note.

Thereafter, Biondo was granted leave to amend his answer to raise an affirmative defense of usury to the foreclosure action.In response, the court granted Powers leave to amend her complaint to read, in pertinent part,

Notwithstanding that both the Promissory Note and the Mortgage ... are stated to be in the amount of ...($350,000), the Plaintiff alleges that such amount was written in the documents as the result of an error or mistake not intended by the Plaintiff, and that the principal amount that should have been stated in the Note is ...($175,000), together with interest and other charges as set forth in said Note and this Amended Complaint.¹

Biondo, in turn, alleged as affirmative defenses usury and insufficient consideration for the note and mortgage, and sought to cancel same as criminally usurious.He also sought partition of the property.

Following trial, the court entered final judgment.It determined that Powers' investment in the subject property totaled $760,000+.It determined this amount consisted of her initial investment of the property [her $134,000+ in closing costs plus $14,000+ in interest payments she made to the seller]; $350,000 representing the principal balance of the note and mortgage; interest on the $350,000 amount; credits for one-half of her payments of real estate taxes and insurance; credit for one-half of her payment of the judgment against Biondo in the separate brokerage lawsuit; and her attorney's and expert witness fees and costs.It determined Biondo's investment in the property to be $134,000+, which consisted of only his closing costs.

The court then ordered partition of the property by sale.It ordered the distribution of the sales proceeds in proportion to the amount of the parties' respective investments: 85% to Powers and 15% to Biondo.The final judgment did not address the foreclosure claim, and required Biondo to bear his own fees and costs.

Merits

Biondo claims that the court relied on an improper method to allocate the proceeds of the partition sale.He maintains that because he and Powers each had a 50% interest in the property, the sales proceeds should have been divided equally between them pursuant to section 64.071(1), Florida Statutes(1997).This section provides that, upon a partition sale, the proceeds from such sale shall be divided among the parties in proportion to their interests.§ 64.071(1), Florida Statutes(1997).Interpreting this statute, Biondo argues that the judgment should have provided that each party should first receive 50% of the sales proceeds, and Biondo should pay Powers 50% of the excess expenses.Under this theory, he asserts that Powers should have received only $626,075.58 ($760,000 [Power's total investment] —$134,000 [Biondo's total...