Free v. Free, 5D05-2393.

• Decision Date: 04 August 2006
• Docket Number: No. 5D05-2393.,5D05-2393.
• Citation: 936 So.2d 699
• Parties: Robert C. FREE, Appellant, v. Marion FREE, f/k/a Marion Moore, Appellee.
• Court: Florida District Court of Appeals

936 So.2d 699

Robert C. FREE, Appellant, v. Marion FREE, f/k/a Marion Moore, Appellee.

No. 5D05-2393.

District Court of Appeal of Florida, Fifth District.

August 4, 2006.

Rehearing Denied September 1, 2006.

Kenneth D. Morse, of Kenneth D. Morse, P.A., Orlando, for Appellant.

August J. Stanton, III, of Stanton & Gasdick, Orlando, for Appellee.

SAWAYA, J.

The final judgment presented to us for review grants to Appellee, Marion Free, the equitable relief of specific performance of a "Contract for Sale and Purchase" and an attached "Land Contract" (collectively referred to as the contract). The judgment is founded on three rulings by the trial court alleged to be erroneous by Appellant, Robert Free, who purchased the property subject to the contract: 1) the contract is valid and enforceable despite the lack of attestation by two witnesses; 2) Marion Free was not in default of the contract and was, therefore, not precluded from seeking specific enforcement of its provisions; and 3) Robert Free was ordered to pay the closing costs associated with the conveyance of the real property despite provisions in the contract requiring that some of the costs be paid by Marion. We do not believe the first two rulings are erroneous, but conclude that it was error to require Robert to pay all of the closing costs in contravention of the express terms of the contract.

In July 1996, Ron and Marion Free entered into a "Contract for Sale and Purchase" with Mr. and Mrs. Leibeck regarding property the Leibecks were offering for sale. The purchase price was $150,000, and the transaction concluded without the assistance of a real estate agent or broker. Attached to the contract was a handwritten agreement entitled "Land Contract," also signed by all parties, which required payments of $1,000 per month and set forth the following pertinent terms:

$108,000.00 Note at 7%—$42,000.00 Existing Bank Note paid by Buyer. The final payment to be made on or before August 1, 1998

John & Janet Leibeck will occupy property until contract is paid in full with 90 days notice from buyer to vacate property. At that time good and marketable title and deed will be turned over.

Buyer and Seller will split closing costs, and title insurance. Mobile dwelling will be turned over for a fee of $1.00 (one dollar). Land taxes to be paid by buyer.

The signatures on the handwritten contract were notarized, but there were no witnesses.

Ron and Marion moved onto the property and made improvements at a cost of approximately $30,000. They were occasionally unable to pay the full monthly amount to the Leibecks on time, but the Leibecks accepted the late payments without complaint. To accommodate Ron and Marion's financial situation, the Leibecks had extended the date for the final balloon payment twice.

Ron and Marion were experiencing severe marital problems by early 2002. Three days after Marion had Ron arrested on domestic violence charges, Ron's father, Robert Free, discussed with Mr. Leibeck the possibility of purchasing the "note and mortgage," advising Mr. Leibeck that he was attempting to help Ron and Marion's marriage. Robert subsequently bought the property via a warranty deed executed by the Leibecks for the amount of $82,000, which was close to the existing balance owed by Ron and Marion.¹ Robert then offered to allow Ron and Marion to make 120 monthly payments of $1,000 each at 7% interest.

Marion refused the offer and filed suit for specific performance of the contract previously entered into with the Leibecks. Robert answered the complaint, asserted affirmative defenses, and counterclaimed. Among his many contentions, Robert asserted that the contract was unenforceable because it did not have the signatures of two witnesses required by section 689.01, Florida Statutes, and because the contract had been breached by Marion. Robert's counterclaim sought $24,625 for money he had loaned to Marion, a writ of ejectment to remove Marion from the property, and to quiet his title claim.

Following a trial, the trial court made extensive findings of fact and settled many issues of credibility against Robert. The court concluded that the original Land Contract had twice been extended and was not in default; that chapter 689, Florida Statutes, was inapplicable to the contract; and that even if the contract was in default, Robert was required to foreclose Marion's interest in the property. The court ordered Robert to transfer the property to Marion for $82,000 within thirty days and denied his claim for interest and closing costs. Regarding Robert's counterclaim, the trial court awarded Robert $5,000, but denied his claims for ejectment and to quiet title in him. Robert appeals, arguing that the remedy of specific performance is wholly inappropriate for the reasons previously stated.²

The decision whether to decree specific performance of a contract is a matter that lies within the sound judicial discretion of the trial court and it will not be disturbed on appeal unless it is clearly erroneous. Bliss v. Hallock, 113 So.2d 889 (Fla. 3d DCA 1959); Martin v. Albee, 93 Fla. 941, 113 So. 415 (1927); Jordan v. Boisvert, 632 So.2d 254, 256 (Fla. 1st DCA 1994); Henderson Dev. Co. v. Gerrits, 340 So.2d 1205, 1206 (Fla. 3d DCA 1976) (citing Molina v. Reiss, 254 So.2d 853 (Fla. 3d DCA 1971)); see also Rybovich Boat Works, Inc. v. Atkins, 585 So.2d 270, 272 (Fla.1991). The exercise of that discretion is governed by consideration of all of the facts and circumstances of the case and application of well-settled legal and equitable principles. Bliss; Stein v. Brown Props., Inc., 104 So.2d 495 (Fla.1958); Martin; Humphrys v. Jarrell, 104 So.2d 404, 410 (Fla. 2d DCA 1958). These considerations and applications make for the advancement of justice and fairness, which are the ultimate goals to be achieved by invocation of this equitable remedy. Rybovich, 585 So.2d at 272 ("[T]he court contemplating an order of specific performance is obligated to consider whether this remedy, based on the facts of the case, would achieve an unfair or unjust result. If so, specific performance is not permitted.") (citing Todd v. Hyzer, 154 Fla. 702, 18 So.2d 888 (1944)).

The relief requested in a suit for specific performance may be granted if it is first established that the contract is valid and enforceable. See Hembree v. Bradley, 528 So.2d 116 (Fla. 1st DCA 1988); Parker v. Weiss, 404 So.2d 820, 821 (Fla. 1st DCA 1981). This is one of those well-settled legal principles previously alluded to, and its status as a legal issue requires that we resolve it based on the de novo standard of review. Robert asserts the contract is invalid because it was not executed in the presence of two subscribing witnesses. He bases this argument on the provisions of section 689.01, Florida Statutes, which essentially require that for a transfer of real estate or an interest in it to be valid, the instrument of conveyance must be in writing and signed by the grantor in the presence of two subscribing witnesses. Because this statute and its provisions regulate the mode of conveying real property or of creating an estate in it, the statute does not apply to documents that are not instruments of conveyance. Thus we must next determine whether the contract at issue here constitutes an instrument of conveyance within the meaning of the statute.

Our analysis of the contract leads us to the inevitable conclusion that it constitutes an agreement for deed, which is typically defined as an agreement that requires the seller to convey legal title to the buyer after the buyer pays all of the installments of the purchase price. White v. Brousseau, 566 So.2d 832 (Fla. 5th DCA 1990). An agreement for deed is primarily utilized as a security device and an alternative to immediate conveyance of title to the buyer with a purchase money mortgage back to the seller. Id.; see also Muina v. Canning, 717 So.2d 550 (Fla. 1st DCA 1998); Purcell v. Williams, 511 So.2d 1080 (Fla. 1st DCA 1987). The Legislature and this court have declared that such agreements are essentially mortgages with attendant rights and remedies provided to mortgagors and mortgagees, which include the seller's remedy of foreclosure if the buyer defaults and the buyer's right of redemption. § 697.01, Fla. Stat. (2005); Vandenberg v. Wells, 721 So.2d 453 (Fla. 5th DCA 1998) (and cases cited therein); see also Muina; Luneke v. Becker, 621 So.2d 744 (Fla. 2d DCA 1993).

A mortgage creates a lien under Florida law, and because it does not convey an interest in real property, the requirements associated with its execution are not as exacting as those of instruments of conveyance, such as a deed. § 697.02, Fla. Stat. (2005); Marcus v. Hull, 142 Fla. 306, 195 So. 170 (1939); Wertkin v. Wertkin, 763 So.2d 461 (Fla. 4th DCA 2000); Martyn v. First Fed. Sav. & Loan Assn., 257 So.2d 576 (Fla. 4th DCA 1971); see also Great Southwest Fire Ins. Co. v. DeWitt, 458 So.2d 398 (Fla. 1st DCA 1984). Therefore, section 689.01 does not apply to mortgages, see Walker v. Franklin, 669 So.2d 1088 (Fla. 4th DCA 1996) (rejecting appellant's argument that the...