Iberiabank, Banking Corp. v. Coconut 41, LLC
Decision Date | 18 November 2013 |
Docket Number | Case No. 2:11–cv–321–FtM–29DNF. |
Citation | 984 F.Supp.2d 1283 |
Parties | IBERIABANK, a Louisiana banking corporation, as successor in interest to Orion Bank, Plaintiff, v. COCONUT 41, LLC, a Florida limited liability company, et al., Defendants. Westwind Contracting, Inc., Third-party Plaintiff, v. HG Coconut, LLC, a Florida limited liability company, Third-party Defendant. HG Coconut, LLC, Cross-claim Plaintiff, v. Westwind Contracting, Inc., Cross-claim Defendant. HG Coconut, LLC, Third-party Plaintiff, v. IberiaBank, a Louisiana banking corporation, as successor in interest to Orion Bank, Third-party Defendant. |
Court | U.S. District Court — Middle District of Florida |
OPINION TEXT STARTS HERE
Michael R. D‘Onofrio, The D'Onofrio Law Firm, PA, Naples, FL, for Cross-claim Plaintiff.
Andrew Ignatius Solis, Cohen & Grigsby, PC, Naples, FL, David Todd Lupo, Robert Rosing, Cohen & Grigsby, PC, Bonita Springs, FL, for Coconut 41, LLC.
Merrick Lawrence Gross, Aaron S. Weiss, Michael E. Strauch, Morgan Swing, Carlton Fields, PA, Miami, FL, for Counter Defendants.
This matter came before the Court on August 27, 28, and 29, 2013 for a non-jury trial on various claims among the remaining parties. As the parties state in the Joint Pretrial Statement, this lawsuit arises from the failed development of the Coconut Crossings Master Plan Development (“Coconut Crossing”), a mixed-use commercial retail center. (Doc. # 285, p. 1.) The last three parties with outstanding claims and/or defenses are Westwind Contracting, Inc. (Westwind Contracting), H.G. Coconut, LLC (HG Coconut), and IberiaBank. The Court's findings of fact and conclusions of law are set forth below.
The first issue concerns the district court's subject-matter jurisdiction. This case was removed from state court by the Federal Deposit Insurance Corporation as Receiver (FDIC–R) based upon the presence of FDIC–R as a defendant in a counterclaim (Doc. # 1). When FDIC–R was dropped as a party due to settlement, the Court initially suggested there was no longer federal jurisdiction, but allowed the parties to address the issue (Doc. # 165). IberiaBank filed a Response (Doc. # 169) arguing that subject-matter jurisdiction continued to exist. The Court ultimately agreed, and entered an Order (Doc. # 195) noting that while the Eleventh Circuit had not yet decided the issue, it was satisfied that the district court continued to have subject-matter jurisdiction. The Eleventh Circuit has now decided the issue, holding in Lindley v. FDIC, 733 F.3d 1043, 1058 (11th Cir.2013), “that when the FDIC is a party to a civil suit and removes that case to federal Court, the District Court has original jurisdiction over claims against non-FDIC defendants, and this jurisdiction is not lost if the FDIC is later dismissed from the case.” Accordingly, the Court has subject-matter jurisdiction over the case.
IberiaBank asserts, for a different reason, that the Court nonetheless lacks subject-matter jurisdiction over one of the claims, i.e., the breach of contract claim against it by HG Coconut. The Court addresses its jurisdiction over that particular claim later in this Opinion and Order.
The Court finds that the evidence establishes the following facts by at least a preponderance of the evidence.
In or about March 2005, Land Development Group, LLC (Land Development Group) executed a Purchase and Sales Agreement to purchase property at the northwest corner of Coconut Drive and Route 41 in Estero, Florida from Coconut North Properties, Ltd. The parties refer to this property as the yet-to-be subdivided/platted master development known as Coconut Crossing. The details of the contract are not material to this litigation.
Prior to closing on the Purchase and Sales Agreement, Land Development Group executed a contract to sell a portion of the Coconut Crossing property to HG Coconut. As of July 2, 2005, Land Development Group, as the contract vendee of the Coconut Crossing property under the Purchase and Sales Agreement, entered into a Commercial Vacant Land Purchase Contract and an Addendum (collectively the Land Purchase Contract) to sell a portion of the Coconut Crossing property to HG Coconut. IberiaBank Exh. B.1 The Land Purchase Contract identified Land Development Group as the “Developer” and HG Coconut as the Purchaser. Id., p. 1. The Land Development Group agreed to sell approximately 14.41 acres of the Coconut Crossing property, designated as Development Area 2, to HG Coconut for $9.8 million. Id., Add. § 1(a). Land Development Group would retain the area designated as Development Area 1 (approximately 32 acres), as well as a number of out-parcels (collectively the Developer's Property).
In the Land Purchase Contract Addendum, both Land Development Group and HG Coconut agreed that “their respective projects are tandem parts of a Master Plan Development,” IberiaBank Exh. B, Add. § 8(a), and agreed to cooperate with each other in a number of areas, see generally id., § 8. Additionally, Land Development Group agreed that it “will be and remain the owner of the adjacent Developer's Property” and that it “shall retain title to Developer's Property and continue to be responsible for performance of Developer's obligations under this Agreement until Developer has completely performed all of Developer's obligations under this Agreement, including without limitation those obligations of Developer under Sections 8 and 9 of this Addendum.” Id. § 3(d).
As to the infrastructure for the vacant land, the parties agreed that Land Development Group was responsible at its sole expense to install all facilities and improvements outside of Development Area 2 which would be governmentally required for the development of Development Area 2 and the Developer's Property. Id. § 9(a). This included an appropriately sized sewage lift station and service lines to the Development Area 2 boundary. Id. § 9(a)(i, ii). Additionally, the parties agreed that the cost to widen Coconut Road was “solely the Developer's expense and that Purchaser shall incur no expenses therefor.” Id. § 9(a)(iii). As “security” for Land Development Group's infrastructure obligations, HG Coconut's counsel, the law firm of Woodward, Pires & Lombardo (WPL), was to hold ten percent (10%) of the purchase price “in escrow at and after Closing until completion of performance by Developer of such obligations.” Id. § 9(b).
The parties anticipated a simultaneous closing of the Purchase and Sales Agreement (by which Land Development Group would obtain ownership of the Coconut Crossing property) and the Land Purchase Contract (by which Land Development Group would convey ownership of Development Area 2 to HG Coconut). Id., Add. § 4. Sometime prior to closing, Land Development Group formed Coconut 41, LLC (Coconut 41) and conveyed its interest in the Land Purchase Contract to Coconut 41. Coconut 41 obtained a $25 million loan from Orion Bank to purchase and develop the Coconut Crossing property. HG Coconut Exh. 18. HG Coconut financed the purchase of Development Area 2 through a loan from Mercantile Bank. (Doc. # 285, Joint Pretrial Statement, p. 2.)
As required by § 9(b) of the Land Purchase Contract Addendum, an escrow account was created to hold ten percent of the purchase price until completion of the infrastructure work by Coconut 41. An Escrow Agreement dated August 10, 2005, between Coconut 41 and HG Coconut providedthat $978,000.00 of the purchase price be placed in escrow with WPL, as escrow agent. IberiaBank Exh. C, § 1. The money was to be released to Coconut 41 upon proof of completion of the infrastructure work. Id., § 3. Interest on the escrow amount belonged to HG Coconut. Id., § 4.
The simultaneous closing was held on August 16, 2005. Coconut 41 purchased the entire tract of vacant land (Development Area 1, Development Area 2, and out-parcels), and then sold Development Area 2 to HG Coconut. As a result, HG Coconut took title to Development Area 2 and Coconut 41 took title to Development Area 1 and various outparcels. Coconut 41 did not retain any interest in the real property purchased by HG Coconut, and HG Coconut did not have any interest in Development Area 1 or the out-parcels. The § 9(b) WPL Escrow Account was funded with $978,000 of the purchase money. Appropriate deeds, mortgages, and other documents were recorded on August 17, 2005. HG Coconut, Exh. 2. At all times thereafter relevant to this case, HG Coconut was the sole owner of Development Area 2.
David Leve (Mr. Leve), HG Coconut's in-house counsel, testified at trial that HG Coconut and Coconut 41 were co-owners in the Coconut Road Master Plan Development, and to that extent would be considered co-developers. Mr. Leve testified that HG Coconut viewed itself as a co-developer of the Coconut Crossings project to the extent provided in the Land Purchase Agreement.
Westwind Contracting is a heavy construction contractor that performs infrastructure and road building work. On June 16, 2006, and August 15, 2006, respectively, Coconut 41 and Westwind Contracting entered into two contracts for the performance of work at Coconut Crossing. The contracts consisted of Addendums to the standard AIA construction agreement. IberiaBank Exhs. D, E, F. The first contract provided for the performance of on-site infrastructure work for $4,527,870.00. Id., Exh. E; Westwind Contracting Exh. 52. The second contract provided for the performance of off-site work, including widening Coconut Road, for $1,554,903.00. IberiaBank Exh. F; Westwind Contracting Exh. 51. HG Coconut was not a party to either contract, had no role in the negotiation of the contracts, and had no obligations in the performance or supervision of the contracts. Westwind Contracting...
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