In re Alchar Hardware, Co., Bankruptcy No. 82-01215-BKC-TCB

• Decision Date: 31 August 1983
• Docket Number: Adv. No. 83-0501-BKC-TCB-A.,Bankruptcy No. 82-01215-BKC-TCB
• Parties: In re ALCHAR HARDWARE, CO. and Knight & Wall Co. Inc., Debtors. Jeanette TAVORMINA, Plaintiff, v. FIR, INC., Lawrence Lyman and Elias J. Hakim, Jr., Defendants.
• Court: U.S. Bankruptcy Court — Southern District of Florida

33 B.R. 230 (1983)

In re ALCHAR HARDWARE, CO. and Knight & Wall Co. Inc., Debtors.

Jeanette TAVORMINA, Plaintiff, v. FIR, INC., Lawrence Lyman and Elias J. Hakim, Jr., Defendants.

Bankruptcy No. 82-01215-BKC-TCB, Adv. No. 83-0501-BKC-TCB-A.

United States Bankruptcy Court, S.D. Florida.

August 31, 1983.

Arthur Weitzner, Robert P. Barnett, Miami, Fla., for trustee.

Lawrence Lyman, St. Petersburg, Fla., for Lawrence Lyman and FIR.

V.J. Voorheis, Jr., Fort Lauderdale, Fla., for Hakim.

MEMORANDUM DECISION

THOMAS C. BRITTON, Bankruptcy Judge.

The trustee seeks judgment for $50,000 against FIR, Inc., and Lyman and a judgment against Hakim for $25,000 based upon events incident to the trustee's unsuccessful efforts to sell certain property in Tampa which was owned by the debtor, Knight & Wall, Co., first to FIR, then later to Hakim. The property is now in the process of being sold to another party.

FIR and Lyman have answered (C.P. Nos. 6, 7) and counterclaimed (C.P. No. 8) against both the trustee and her attorney. The counterclaim has been dismissed as to the trustee's attorney, who was never a party. Hakim has also answered (C.P. No. 18) and counterclaimed (C.P. No. 20) and has crossclaimed against FIR and Lyman. (C.P. No. 17). The matter was tried on August 18.

A threshold issue, raised by Hakim, is whether this court has jurisdiction. That issue was heard on August 15. Hakim withdrew his objection. This court has jurisdiction to hear this matter as a "related proceeding" under the Emergency Rule. § (d)(3)(A). In addition, each of the parties has consented before me that this court may enter judgment (rather than a proposed judgment) as is authorized by § (d)(3)(B) of that Rule.

The property in question is a tract of about 22.79 acres partially improved with warehouses, a parking lot and a rail spur on that part of the property (about 37.5 percent) which is presently zoned for industrial use. The rest of the property, presently zoned for agriculture, is uncleared and unused. The property is surrounded by industrial property and there is every reason to believe that the entire property could be rezoned for industrial use.

In December, 1982, Lyman, an attorney, submitted a written offer on behalf of FIR to buy the property for $1,995,000. Consistent with 11 U.S.C. § 363(b), the trustee sought leave from the court to accept the offer (as modified by mutual agreement between the two parties). After notice and a hearing, the trustee, on January 19, 1983, was "authorized to enter into the proposed executory contract . . . as modified" and FIR was ordered to deposit $50,000 with the trustee forthwith. FIR's offer was accompanied by a $100 deposit and stipulated payment of a $50,000 deposit "upon acceptance."

On February 3, 1983, Lyman gave the trustee, on FIR's behalf, his personal check for $50,000. The check was dishonored and the $50,000 remains unpaid.

FIR and Lyman excuse their breach on five grounds.

(1) They say, first, that the offer was never accepted, because the trustee never signed and delivered an instrument of acceptance. I disagree. The offer was expressly "subject to approval by Bankruptcy Court." The trustee's application for leave to accept the offer as modified with FIR's consent, coupled with the court's authorization, ratification and confirmation of the sale (C.P. No. 169), all of which was done with FIR's knowledge and participation, bound the trustee and constituted acceptance of the modified offer.

(2) They argue next that there was no contract because the property was never described or identified with sufficient specificity. Again I disagree. Lyman's offer makes reference to a legal description which he failed to deliver. However, the trustee filed with the court a specific metes and bounds description (C.P. No. 161), supplying Lyman's omission, and I find that there was never any confusion on the part of the parties that this was the intended legal description of the property.

(3) They next say that the contract characterized the property as "twenty-four (24) acres more or less" and it was, in fact, 1.21 acres (five percent) less. The deficiency does not exceed the permissible latitude of the contractual characterization. Under Florida law, the purchase price could be adjusted at closing for any deficiency in the acreage. 33 Fla.Jur., Vendor and Purchaser, § 60; Phifer v. Steenburg, Fla. 1914, 66 Fla. 555, 64 So. 265.

(4) They next argue that the trustee never delivered a title guarantee. FIR's offer had stipulated that the trustee would deliver a "title guarantee" within five days from the date of the contract. However, this provision was mutually modified to provide:

"Concerning title, the Trustee will convey by Trustee\'s Deed which will be good and marketable."

Since FIR has never tendered its deposit, it never became entitled to performance of this condition of the contract. This record does not demonstrate that the trustee could not deliver "good and marketable" title.

(5) They contend, finally, that the trustee or her attorney knew that FIR planned to use the property for purposes prohibited by agricultural zoning and that the trustee and her attorney represented that the existing zoning was compatible with that intended use. In fact, the portion zoned for agriculture would not permit such use. The evidence is in conflict. I find that neither the trustee nor her attorney ever made a written or oral representation as to the existing zoning on the property until December 27, 1982, when they filed Exhibits In Conjunction With Proposed Sale of Real Property when they sought and obtained authorization to sell the property to FIR. Those exhibits included an appraisal which described the existing zoning accurately.

The trustee, who delegated this matter to her attorney, never knew the zoning and there is no testimony that she made any representation relied upon by anybody. The witnesses who have testified that they relied upon her attorney's oral representation have a financial interest in this matter.

Even if there had been a representation that the entire tract was presently zoned for industrial or commercial use, it is clear (at least in Florida) that such a misrepresentation would not be ground for recission.

"A misrepresentation by a vendor of land as to matters that can be ascertained by an examination of public records is not ordinarily actionable . . .". 33 Fla.Jur., Vendor and Purchaser, § 43.

This rule applies to representations regarding zoning. Turvey v. Kulazenka, Fla.App. 1977, 341 So.2d 551. Furthermore, the rule would...