Devco Development Corp. v. Hooker Homes, Inc., s. 86-3233
| Decision Date | 04 December 1987 |
| Docket Number | 87-640,Nos. 86-3233,s. 86-3233 |
| Citation | 518 So.2d 922 |
| Parties | 5 UCC Rep.Serv.2d 157 DEVCO DEVELOPMENT CORPORATION, Appellant, v. HOOKER HOMES, INC., and Nona Barnes, Inc., d/b/a Hooker Barnes Homes, Appellees. |
| Court | Florida District Court of Appeals |
Mark K. Straley and Frances Makemie Toole of Bush, Ross, Gardner, Warren & Rudy, Tampa, for appellant.
James M. Shuler and Charles L. Weissing of Kass, Hodges & Massari, Tampa, for appellees.
Devco Development Corporation, the developer of a residential subdivision under a contract with appellees, hereinafter referred to as "Hooker Barnes," to sell developed lots to Hooker Barnes appeals from a final judgment determining that Devco was not entitled to liquidated damages by reason of the failure of Hooker Barnes to close purchases of the lots developed by Devco. We affirm.
There is no question raised as to Devco's satisfactory performance of the development work called for by the contract. The only issues are, first, whether Devco timely performed under the terms of the contract so that Hooker Barnes was in default on its obligation to purchase lots from Devco and, second, even if there was such timely performance, whether Devco properly exercised its contractual right to the liquidated damages it claims. The trial court decided against Devco on both issues.
As to the first issue, we disagree with the trial court's conclusion that appellant Devco breached the contract for development and sale. Briefly stated, (a) excessive rain, by the terms of the contract, would constitute "any other condition" beyond Devco's control which would excuse a delay in performance; (b) in the absence of any showing of fraud or bad faith, the Heidt certificate, which stated in pertinent part that Devco was entitled to an additional fifty days because of delays caused by rainfall, should have been accepted as settling the dispute between the parties, as provided by the contract; and (c) the technical deficiency of the certificate (i.e., the failure to list the beginning and ending dates of delay periods) did not render the certificate fatally defective, especially in the absence of any pretrial objection by Hooker Barnes to the form of the certificate. Accordingly, the final judgment is reversed insofar as it finds that Devco breached the contract.
At the heart of the second issue are the following contractual provisions: Paragraph 3.a. of the contract between Devco and Hooker Barnes provides that Hooker Barnes Paragraph 16 of that contract provides that "[i]n the event [Hooker Barnes] defaults with respect to its obligations under this Contract, the ... Letter of Credit held by [Devco] on this Contract may be taken and kept by [Devco] as full liquidated damages." An addendum to that contract provides The letter of credit, issued by Mellon Bank addressed to Devco provided that "We hereby issue our Irrevocable Letter of Credit ... in your favor for the account of [Hooker Barnes] ... in the amount of US $200,000 available by your drafts at sight drawn on Mellon Bank ... accompanied by the following: 'Demand for payment and certification' per Exhibit 'A' as attached." The exhibit A attached to the letter of credit is entitled "Demand for Payment and Certification" and contains the statement, to be signed by Devco, that
The court's conclusions concerning these contractual provisions were that (a) Devco gave up its right to recover on the letter of credit by failing to take the requisite steps to collect on the letter before the letter's expiration on April 4, 1985, and (b) the letter was Devco's sole liquidated damages remedy. We agree with the trial court.
As to (a), the contract and the letter of credit provided that Devco could be paid by Mellon upon presentation of two documents--a sight draft and a completed form of Demand for Payment and Certification. Devco provided neither of the required documents to Mellon.
Devco argues that it was not entitled to payment under the letter of credit without having possession of the letter itself and that Hooker Barnes, by protesting to Stewart Title Devco's request to Stewart that the letter be delivered to Devco, thus leading to an interpleader suit filed by Stewart Title, prevented Devco from getting the letter and thereby from getting payment of the $200,000 before the letter expired. However, nothing in either the contract or the letter required that Devco present the letter in...
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