Hutchison v. Tompkins

• Decision Date: 14 September 1970
• Docket Number: No. 69--163,69--163
• Citation: 240 So.2d 180
• Parties: H. D. HUTCHISON and Elizabeth L. Hutchison, his wife, Appellants, v. C. E. TOMPKINS, Douglas Mac Tompkins and the Florida Escrow Corporation, Appellees.
• Court: Florida District Court of Appeals

Page 180

240 So.2d 180

H. D. HUTCHISON and Elizabeth L. Hutchison, his wife, Appellants, v. C. E. TOMPKINS, Douglas Mac Tompkins and the Florida Escrow Corporation, Appellees.

No. 69--163.

District Court of Appeal of Florida, Fourth District.

Sept. 14, 1970.

Rehearing Denied Oct. 29, 1970.

David C. Holloman, Arcadia, and Irving Nathanson, Cocoa, for appellants.

Robert Dyer, of Van den Berg, Gay, Burke & Dyer, Orlando, for appellees Tompkins.

OWEN, Judge.

The vendors under an executory contract for sale of real property brought suit against the vendees and an escrow agent ¹ seeking judgment in the amount of the cash deposit which the vendees had placed with the escrow agent at the time of executing the contract. There were no allegations of any actual damages sustained by the vendors as a result of the vendees' default, the vendors alleging simply their election (as provided in the contract) to retain the deposit in full settlement of their claims for damages. The vendees' motion to dismss the amended complaint for its failure to state a cause of action against them was granted by the court on the authority of Pembroke v. Caudill, 1948, 160 Fla. 948, 37 So.2d 538 and upon the plaintiffs' declining to plead further, final judgment was entered in favor of the vendees.

Whether the sum stipulated in the contract to be paid in the event of a breach will be considered as a penalty or as liquidated damages is always a question of law to be determined by the court in each particular case. Pembroke v. Caudill, supra. Here, the purchase price was $125,000, of which $10,000 was paid as a deposit at the time the contract was executed. There are no allegations in the amended complaint nor any provisions in the contract of sale by which it can be shown that any damages which might reasonably have been expected to flow from a breach of the contract were rendered uncertain, conjectural or speculative. Any loss of profits which the vendors might sustain by virtue of the vendees' failure to complete the transaction was definitely ascertainable in accordance with settled legal principles. The vendees had not been in actual possession of the property at anytime as possession was to be delivered only upon closing. Any broker's commission which may have been incurred by the vendors was readily determinable without uncertainty or speculation. Thus, there being no uncertainty or difficulty of proof as to the vendors' actual damages flowing from the vendees' breach, there was no need for, or purpose to be served by, the parties stipulating to a sum as liquidated damages. Chace v. Johnson, 1929, 98 Fla. 118, 123 So. 519. The trial court, following the guidelines set forth in Pembroke v. Caudill, supra, simply held (at least inferentially) that the contract provided for a penalty rather than for liquidated damages. We believe this was a correct determination. Under such circumstances the vendors are confined to their actual damages. Since none were alleged the court correctly dismissed the amended complaint as to the vendees, and upon the vendors declining to plead further, the court properly entered judgment in favor of the vendees.

Appellants rely strongly upon Beatty v. Flannery, Fla.1950, 49 So.2d 81, which is a leading case in this jurisdiction for the general principle that, subject to certain exceptions, a vendee in default is not entitled to recover from a vendor money paid in part performance of an executory contract. The general principle has been recognized and applied in numerous cases ² and certain well-recognized exceptions to this general principle have been applied to permit the vendee relief in certain cases. ³ But neither the Beatty case nor any of those which have applied the Beatty principle have any application here. All of those cases involved a defaulting vendee seeking to recover a deposit paid to a vendor. In the instant case, notwithstanding the language of the forfeiture clause of the contract, not only did the vendors not have custody or control of the deposit, but also the vendees were somehow successful in prevailing upon the escrow agent to return the deposit to them. Thus, instead of a Beatty factual situation, we have a Pembroke factual situation. It cannot be denied that the distinction appears to place in more advantageous position the vendor who obtains custody of the deposit than one who does not. Be that as it may, neither the Beatty line of cases nor the Pembroke holding deprive a vendor from seeking damages actually sustained as a consequence of the vendees' breach of the executory contract.

The vendors in this case had that right. They chose instead to claim forfeiture of the deposit which the court determined as a question of law to be a penalty and not enforceable. We find no error in this determination.

Affirmed.

REED, J., concurs.

WALDEN, J., dissents, with opinion.

WALDEN, Judge (dissenting).

Upon defendant's motion the trial court dismissed Count I of plaintiff's Amended Complaint because of its failure to state a cause of action. The case of Pembroke v Caudill, 1948, 160 Fla. 948, 37 So.2d 538 ¹ was cited as the basis for the dismissal and judgment was entered thereupon for the defendants. A majority of this Court has approved this manner of disposition.

The simple issue then and now is: 'Does Count I of the Amended Complaint state a cause of action?' Being satisfied beyond all doubt that it was legally sufficient, I must dissent and say that I would reverse the trial court decision and remand with instructions to reinstate the complaint.

It goes without saying, or should, that in considering such challenge to the sufficiency of the complaint all of plaintiffs' well-pleaded allegations are to be taken as admitted and true, and the Court's gaze is limited to the four corners of the complaint. And if a complaint states any grounds for relief it should not be dismissed.

Let us look at the offending document, plaintiffs' First Amended Complaint, ² which was deemed to be fatally defective. It appears from it that plaintiffs agreed to sell and defendants agreed to purchase real estate pursuant to the terms of a written contract. The sales price was $125,000.00. $10,000.00, or 8% Of the sales price, was deposited by the defendants as earnest money with an escrow agent.

Plaintiffs alleged full performance on their part.

Plaintiffs alleged two breaches of the contract by the defendants. Defendants failed and refused to complete the purchase of the property as they agreed to do. Defendants wrongfully obtained the return of their earnest money deposit from the escrow agent contrary to the terms of the sales contract.

It is clear and undisputed that the suit is for damages for breach of contract and in their ad damnum clause plaintiffs demanded judgment against the defendants in the sum of $10,000.00, together with interest and costs.

According to this writer's understanding, this complaint clearly and abundantly states a cause of action. But what is the position of the majority whereby it agrees that plaintiffs have failed to state a cause of action? Hoping to be accurate and in context, the majority believes that paragraph 7 of plaintiffs' Count One in the amended complaint, 'That Plaintiffs elect to retain the deposit heretofore paid by the Buyer.', was an improper element of damage and that the contract terms dictated that the deposit was a penalty and not liquidated damages. As such, the agreement was illegal and unenforceable. The gravamen of their opinion is, I believe, this statement, 'The trial court, following the guidelines set forth in Pembroke v. Caudill, supra, simply held (at least inferentially) that the contract provided for a penalty rather than liquidated damages. We believe this was a correct determination. Under such circumstances, the vendors are confined to their actual damages. Since none were alleged, the court correctly dismissed the amended complaint * * *'

With this backdrop, there are several points that merit discussion.

First, if it be assumed that the deposit was a penalty and not liquidated damages--a position I in no way concede--the majority opinion goes on to correctly reflect that plaintiffs are entitled to recover their actual damages. With this, the claim for special damages contained in paragraph 7 of the complaint, supra, should have been simply deleted upon motion to strike or by the court sua sponte. If it be so blotted out, then the complaint still must be entertained and must not be dismissed because, at the least, plaintiffs are entitled to nominal damages. Where there has been, as here, a breach of duty or an invasion of legal rights, the claimants are still entitled to receive nominal damages even if there has been no material loss to plaintiffs. ³

More importantly, the complaint adequately and sufficiently affords a basis for general damages. General damages are those which are the direct, natural and necessary result of the wrongful act of omission. ⁴ When resulting from a breach of contract such damages are presumed to have been contemplated by the parties. ⁵ Such general damages do not have to be specially or particularly plead, but may be recovered under a general allegation of damages, ⁶ such general allegation being found in the instant complaint.

In Augustine v. Southern Bell Telephone & Tel. Co., Fla.1956, 91 So.2d 320, a complaint was dismissed because it failed to specify with particularity the special damages claimed by plaintiff. It was a suit for breach of an oral contract. Justice Thornal stated the problem as follows:

'In Tom Lee, Inc. v. Pacific Telephone & Telegraph Co., 154 Or. 272, 59 P.2d 683, it was held that a complaint by a customer against a telephone company for an erroneous listing in a telephone directory was sufficient against a demurrer if it set forth a basis for the recovery of nominal damages even though the complaint failed to allege adequately the basis for recovery of so-called...