Kissman v. Panizzi
| Decision Date | 26 January 2005 |
| Docket Number | No. 4D04-723.,4D04-723. |
| Citation | 891 So.2d 1147 |
| Parties | Dennis P. KISSMAN, Nancy R. Kissman, and Marina Management Services, Inc., Appellants, v. Ron PANIZZI, John Detweiler, and Helene Farrell, Appellees. |
| Court | Florida District Court of Appeals |
Thomas J. Tighe and Leonard Wilder of Tucker & Tighe, P.A., Fort Lauderdale, for appellants.
Lynne S.K. Ventry of Lynne S.K. Ventry, P.A., Delray Beach, for appellee Ron Panizzi.
Dennis and Nancy Kissman, the sellers, appeal a final judgment granting specific performance of a commercial real estate purchase contract to Ron Panizzi, the buyer. Panizzi cross-appeals the trial court's failure to award monetary damages in addition to specific performance.
We affirm on all issues. The real estate contract did not permit the sellers to terminate for the buyer's failure to secure a loan commitment. On the cross-appeal, the buyer's damages incident to specific performance were offset by the sellers' costs.
The central issue in the case is whether the buyer complied with the financing provision of the contract.
By the real estate contract, the sellers agreed to sell a commercial building for $500,000. The contract called for a down payment of $5,000, with $20,000 to be deposited within ninety days. Included in the contract was the following language:
The contract required a closing date on or before September 30, 2002. The "Effective Date" of the contract was March 22, 2002.
To secure financing, the buyer contacted a bank in April and May, 2002, with which he had a preexisting relationship. With a closing not scheduled until September, 2002, the bank told the buyer that it was too early to submit a formal loan application. It was the bank's policy not to entertain a loan application more than ninety days away from the closing. A senior financial specialist from the bank testified that the buyer had consulted with her numerous times prior to May 22, 2002 to discuss the loan; she had received everything she needed from the buyer to process the loan.
On June 7, 2002, the buyer told Nancy Kissman that he could not yet obtain a loan commitment because it was too early to apply for a loan. He indicated that he intended to go forward with the purchase and was going to complete a survey of the property the next day.1 The survey was completed on June 8.
On June 10, the sellers' attorney wrote to the buyer's attorney, indicating that the Kissmans were canceling the contract because the buyer had not yet applied for financing. On June 20, the buyer paid the additional $20,000 deposit to the escrow agent with notice to the sellers.
The heart of this appeal is whether the contract authorized the sellers to cancel because the buyer failed to comply with the "Third Party Financing" provision of the contract. The trial court correctly concluded that the sellers did not have the right to cancel, because the financing provision authorized only the buyer to cancel if the buyer did not secure a financing commitment.
The interpretation of a contract is a question of law for which this court applies a de novo standard of review. See McPhee v. Paul Revere Life Ins. Co., 883 So.2d 364, 367 (Fla. 4th DCA 2004)
.
The contract's "Third Party Financing" paragraph indicates that the buyer will "apply" for financing within sixty days of the "Effective Date." The provision further states that, "If Buyer, after diligent effort, fails to obtain a written commitment within 90 days from Effective Date, Buyer may cancel the Contract by giving prompt notice," and receive his deposit back. (Emphasis added).
Nothing in this language gives the Sellers the right to cancel the contract if the Buyer does not secure financing; only the buyer may cancel if, "after diligent effort," he fails to obtain a written loan commitment within ninety days of the effective date.
By specifying that the buyer could "waive" the financing contingency, paragraph 4 of the contract reinforces the interpretation that only the buyer, and not the sellers, had the right to terminate the contract. That paragraph states that the sellers must provide evidence of title to the buyer "within 10 days" from the date the buyer "meets or waives financing contingency." This clause means that the buyer may elect to proceed with the contract, to "waive" his right to terminate, if he is unable to secure a loan commitment "within a ninety-day time frame."
As an expert testified at trial, many real estate contracts allow either a buyer or a seller to cancel if the buyer does not obtain a financing commitment within a certain time frame. These contracts protect both parties; a buyer cannot be forced to close on a property he cannot afford and a seller faced with a penurious buyer may terminate the contract and seek another purchaser, rather than wait until closing and be left with legal remedies against an empty pocket. As the expert testified, the financing provision in this contract did not contain such a bilateral right of termination.
The sellers analogize this case to Garcia v. Alfonso, 490 So.2d 130 (Fla. 3d DCA 1986). There, in a brief opinion, the court concluded that where "time is of the essence" in a contract, the failure of the buyer to comply with a financing contingency clause allowed the seller to terminate the contract. The...
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