Gould v. National Bank of Florida, 81-502
| Decision Date | 16 November 1982 |
| Docket Number | No. 81-502,81-502 |
| Citation | 421 So.2d 798 |
| Parties | Gerald GOULD and Jerome H. Zwickel, Appellants, v. NATIONAL BANK OF FLORIDA, a National Banking corporation, and NBF Mortgage Corporation, Appellees. |
| Court | Florida District Court of Appeals |
Lapidus & Stettin, Miami, for appellants.
Levine, Reckson, Reed & Geiger, Miami, for appellees.
Before NESBITT, DANIEL S. PEARSON and FERGUSON, JJ.
Gerald Gould and Jerome Zwickel appeal an order setting aside jury verdicts entered in their favor. They raise four points as error, all of which challenge the propriety of granting a new trial. We affirm in part and reverse in part.
Appellees, the Bank and the Mortgage Company (NBF), are wholly owned subsidiaries of the National Banking Corporation which is controlled by Joseph Kanter, the board chairman and principal shareholder. In 1978, Gould approached Kanter to arrange financing for several shopping center projects on the west coast of Florida. At a meeting of July 25, 1978, held at the Bank, Kanter expressed to Gould and Zwickel a desire to participate in the project as a joint venture partner. Kanter instructed Zwickel to provide details of the projects for officers of the bank and mortgage company. Gould and Zwickel presented an operating budget to Kanter at this July, 1978 meeting and received from him assurances of a $25,000.00 line of credit for operating expenses, which debt, as appellants contend, was to be later assumed by one of Kanter's subsidiaries--either the bank or the mortgage company--which would be supplying operating overhead monies as its contribution to the venture. At Kanter's behest, Gould and Zwickel signed a letter at the time the loan was made agreeing to give the Bank a right of first refusal to make loans to the joint venture.
By October, 1978, Gould and Zwickel had used up the $25,000.00 in administrative and planning efforts. They refused to borrow more money from the Bank until Kanter fulfilled his promise to designate a venture partner and execute a joint venture agreement. In late October, Kanter authorized Park Jones, as President of NBF, to prepare and execute a "General Letter of Agreement" in which NBF would provide operating and equity funds as the joint venture partner.
The document signed by the parties provided in pertinent parts:
GENERAL LETTER OF AGREEMENT
This agreement shall serve the purpose of effecting an understanding between the following parties: Jerome H. Zwickel, Gerald H. Gould, and NBF Mortgage Corporation. The principal business engaged in will be the construction and operation (rental) of shopping centers.
The functions of the above parties are as follows:
J. Zwickel, assisted by G. Gould will select and contract for the sites, secure tenants, contract for the construction, and permanent financing which will be required in connection with the development of the shopping centers anywhere within the State of Florida.
NBF Mortgage Corporation in exchange for forty (40%) percent of the profits, shall either provide, arrange for, or "broker" the required development, construction monies for permanent financing at the then current market interest rate and fees. In the event NBF Mortgage Corporation is not able to obtain financing for any particular project, Zwickel and Gould can obtain financing elsewhere, but NBF Mortgage Corporation will still retain forty (40%) percent interest in the project.
NBF Mortgage Corporation shall provide one hundred (100%) percent of any equity and operating monies necessary; however, operation shall be limited to a total of $50,000.00 (total outstanding at any one time).
Refundable deposits will be advanced by NBF Mortgage Corporation and shall not be considered a part of operating capital. Any non-refundable deposits will only be advanced by NBF Mortgage Corporation upon their return approval.
Equity money provided is to be repaid before any profit is distributed.
* * *
* * *
This General Letter of Agreement will serve as our working understanding until NBF Mortgage Corporation attorneys compile an acceptable agreement which will comply with Federal Regulations which are applicable and acceptable to the Chairman of the Board of the National Bank of Florida who is the Chairman of the National Banking Corporation of Florida, Inc.
Agreed to and accepted this 26th day of October, 1978.
/s/
Gerald H. Gould
/s/
Jerome H. Zwickel
/s/
Park T. Jones, Jr.
President
The General letter of Agreement was executed by Gould and Zwickel contemporaneously with a new $40,000.00 note to the bank which represented a renewal of the earlier $25,000.00 note and an additional advance of $15,000.00 for venture overhead capital. Zwickel returned to work on the projects and was ready to begin construction in late 1978 having been assured by Park Jones that funding was available.
During this same period Zwickel and Gould proposed to Kanter another business opportunity aside from the joint venture--the construction and long-term lease of a free standing restaurant in Tampa called "Dino's". Appellants made a $5,000.00 deposit toward purchase of the vacant land and allegedly received a verbal commitment from NBF, through Kanter, to advance $62,500.00 cash for the transaction. On the day before the scheduled closing NBF informed Gould and Zwickel that it would not provide the funds for the land purchase but instead produced an individual named Silverman to take NBF's position. After Silverman was unsuccessful in securing a loan to obtain the necessary $62,500.00, Gould personally borrowed that amount from Metropolitan Bank of Tampa and closed the land purchase deal. Gould contends that he personally borrowed the monies only after two conditions were met, (1) Silverman agreed to guarantee repayment of the monies borrowed by Gould within ninety days of the closing if a construction loan had not been funded, and (2) NBF agreed to assume Silverman's responsibilities if Silverman failed to perform. Silverman allegedly failed to perform and NBF refused to buy out Gould's interest. When this trial commenced two (2) years later, Gould, as owner of the land, had paid $18,000.00 in interest and still owed $62,500.00 to Metropolitan Bank.
Near the end of 1978 with the venture still in need of capital, appellee-Bank refused to advance more money for operating expenses unless Gould and Zwickel would acknowledge that they were personally liable for repayment; they refused.
In June, 1979, the Bank filed suit against Gould and Zwickel alleging that they failed to pay the balance of $38,234.58 remaining on the renewed note of October 25, 1978. Appellants by answer generally denied the allegations of the complaint. As affirmative defenses, Gould alleged estoppel and Zwickel alleged fraud in the making and obtaining of the promissory note. Simultaneously, appellants filed a third-party complaint against appellee NBF alleging that the General Letter of Agreement was a memorialization of Kanter's promise that the partnership would be responsible for up to $50,000.00 for operating expenses and that appellants would not be personally liable on the note. Appellants also claim in the third-party complaint that NBF breached an oral agreement, confirmed by telegram, to provide equity capital in the amount of $62,500.00 to purchase the parcel of land in Tampa. NBF answered the third-party complaint alleging that the intent of the General Letter of Agreement was to give the Bank a right of first refusal to finance development of projects to be selected by appellants, as to those projects which the Bank decided to finance, and since the Bank had decided not to finance any of the projects presented to it by appellants--the condition precedent to its commitment--there was no obligation to provide monies to the venture. As to the third-party claim based on a failure of NBF to provide capital for purchase of land in Tampa, NBF alleges again that the telegram 1 establishes a condition precedent to any responsibility on its part to repay any of the sums borrowed by Gould from Metropolitan Bank of Tampa and the "complaint is absent any allegations of the occurrence of such conditions precedent". 2
The case was tried by a jury for a week. At the commencement of the trial the Bank moved in limine to preclude Gould and Zwickel as defendants from offering parol evidence of any verbal agreement made at or before the execution of the note, and NBF moved in limine to preclude appellants from offering evidence of alleged misrepresentations as to the Tampa land purchase on grounds that that transaction was outside the scope of the joint venture agreement. The court did not expressly rule on the motions. Though appellants were permitted, over objection, to offer evidence of lost future profits, NBF's motion for directed verdict on that claim was granted and the jury was so instructed. At the close of appellant's case their motion to conform the pleadings to their proof with respect to the Tampa land purchase was granted over objection. A motion by NBF for a directed verdict on the fraud count of the third-party complaint and a motion by the Bank for a directed verdict as to its claim on the note were both denied. The case was submitted to the jury on all three claims: (1) the Bank's claim on the promissory note, (2) Gould and Zwickel's claim against NBF for breach of contract, (3) Gould and Zwickel's claim against NBF for fraud. A jury returned a general verdict in favor of Gould and Zwickel in the Bank's suit on the note, a $110,000.00 verdict in favor of Gould and Zwickel on their breach of contract claim against NBF Mortgage, and a finding of no fraud by NBF on the third-party complaint.
By order dated February 17, 1981 the court granted motions of the plaintiff Bank and third-party defendant NBF for a New Trial unless appellants agreed to reduce the verdict on their third-party complaint from $110,000.00 to $25,000.00....
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