Lorber v. Passick

• Decision Date: 01 September 2021
• Docket Number: No. 4D20-393,4D20-393
• Citation: 327 So.3d 297
• Parties: Robert LORBER, Appellant, v. Jeffrey PASSICK, AS Successor TRUSTEE OF the SYLVIA PASSICK REVOCABLE TRUST, Appellee.
• Court: Florida District Court of Appeals

327 So.3d 297

Robert LORBER, Appellant,

v.Jeffrey PASSICK, AS Successor TRUSTEE OF the SYLVIA PASSICK REVOCABLE TRUST, Appellee.

No. 4D20-393

District Court of Appeal of Florida, Fourth District.

[September 1, 2021]

Adam G. Heffner of Law Offices of Adam G. Heffner, P.A., Boca Raton, for appellant.

Robin Bresky and Jonathan Mann of Law Offices of Robin Bresky, Boca Raton, for appellee.

Forst, J. Appellant Robert Lorber ("Buyer") appeals the trial court's entry of final summary judgment in favor of Appellee Jeffrey Passick, as Successor Trustee of the Sylvia Passick Revocable Trust ("Seller"), in the latter's action stemming from a failed real estate transaction. As set forth below, we conclude that the trial court erred in granting Seller's motion for summary judgment as to Buyer's counterclaims, and that the trial court therefore necessarily erred in later entering final summary judgment on the underlying complaint in favor of Seller.

Background

Pursuant to an " ‘As Is’ Residential Contract for Sale and Purchase" ("Purchase Agreement"), Buyer agreed to purchase certain real property from Seller. However, immediately before closing, Buyer's agent informed Seller via email that Buyer no longer consented to the Purchase Agreement. As stated in the email:

Ever since my client first came to the home, he indicated that there was a suspicious odor. We inquired about this and asked if there was any reason or cause for this. 48 hours before closing my client finds out through his insurance company that this home had substantial water damage throughout which is supported by these insurance docs.

My client believes that this odor is due to this water damage ... [and] states that when he went to the home today, that the odor was strong and he sensed a burning feeling in his lungs.

(Emphasis added). Later, Buyer's agent informed Seller that Buyer had instructed him to cancel the Purchase Agreement.

A. Buyer's Counterclaim

After Buyer failed to close on the property, Seller filed a complaint for breach of contract. In response, Buyer filed an "Answer with Affirmative Defenses and [Buyer's] Counterclaim." Buyer twice amended his Counterclaim, with the Second Amended Counterclaim serving as his operative pleading.

The Second Amended Counterclaim contained three counts—breach of contract; fraud in the inducement; and negligent misrepresentation. Buyer's breach of contact count alleged that shortly before closing, but "after the contract contingency periods had expired," Buyer discovered that the property had "suffered a significant water intrusion loss on or about April 28, 2013," resulting in a "significant settlement paid by The Hartford" for resolution of the "flood claim." Buyer therefore alleged that Seller's "failure to disclose the prior water intrusion and/or mold issues" violated the Purchase Agreement's paragraph 10(j)—which provided that "Seller knows of no facts materially affecting the value of the [property] which are not readily observable and which have not been disclosed to Buyer."

Buyer's fraud in the inducement count alleged that Seller's "failure to disclose the prior water intrusion and/or mold issues[,]" combined with Seller's knowing misrepresentations in the "Seller's Property Disclosure – Residential" form ("Disclosure Form"), which stated that the property had not been affected by any past or present water intrusion issues, or any past or present drainage or flooding problems,¹ "were material and calculated to induce [Buyer] into executing the subject real estate contract[.]"

Buyer's negligent misrepresentation count pled similar allegations to those contained within the fraud in the inducement count, alleging that Seller should have known that its representations were false and that, to the extent that Seller had no knowledge of the representations in the Disclosure Form, Seller presented the form to Buyer knowing that Buyer would rely upon those representations.

B. Seller's Motion for Summary Judgment

Seller ultimately filed a "Motion for Summary Judgment as to [Buyer's] Counterclaim[s]." In support of the motion, Seller attached several deposition statements from both Buyer and Buyer's agent, which Seller asserts demonstrated Buyer's awareness that something was wrong with the property from the moment he first set foot in the house. Specifically, Buyer testified that when he "first went into the house, there was a musty odor" that he asked about "[p]robably ... three times." Although he attested that Seller's agent explained the smell as being attributable to the air conditioning being turned off, he stated that he continued to smell the "musty" or "dank" odor and noted that "nobody explained it away." He acknowledged thinking that the "musty" or "dank" smell might be mold and that the smell indicated to him something was wrong.

Buyer's agent, in turn, testified that "the odor was similar to other properties [he had] seen that ... had water intrusion" and that he informed Buyer that "when we have a musty odor, there is the possibility that there is mold somewhere." However, Buyer's agent stated he did not inform Buyer that water intrusion was possible, and that mold did not always arise out of a water intrusion event.

Based on this deposition testimony, Seller argued that the "water intrusion and/or mold issue" was readily observable and that a claim for breach of contract, fraud, and negligent misrepresentation could not lie under such circumstances.

C. Buyer's Opposition to Seller's Motion for Summary Judgment

Buyer filed a memorandum of law in opposition to the motion for summary judgment. Although Buyer conceded a "dank or stale" odor was present within the property, he proclaimed that the smell was dismissed convincingly by Seller's listing agent. He further proclaimed no discernable evidence at that time showed that the odor "had any connection whatsoever to the undisputed fact that the house had suffered a prior flood, [which] was specifically not disclosed[.]" Buyer asserted that, accepting the allegations in the light most favorable to him, genuine issues of material fact remained.²

In support of his memorandum in opposition, Buyer attached two affidavits—one from himself and one from his agent. Within Buyer's affidavit, he attested: (1) Seller's agent had represented the smell was attributable to "the property being unoccupied and the air conditioning calling for a higher temperature"; (2) Seller's agent presented him with the Disclosure Form (stating that the property had not been affected by any past or present water intrusion issues); (3) although he continued to notice a "dank/stale odor" during the inspection period, he accepted Seller's agent's explanation of the smell because the Disclosure Form indicated that the property had suffered no water intrusion or flood damage; (4) in the days before closing, he met with his insurance agent to obtain insurance on the property, and that the agent, "[a]s a result of nothing less than serendipity, ... was aware that the ... property had suffered a substantial flood a few years prior"; and (5) he would have canceled the Purchase Agreement or demanded a reduction in price had he been aware of the water intrusion and/or flooding issues.

Buyer's affidavit further attested that his claim was "not based upon the existence or non-existence of mold or of an odor" and that he was "not aware of any affirmative actions [he] could have taken to investigate a flood that [he] did not know existed" and was never informed about. Moreover, Buyer claimed he had no knowledge that the mold's existence was in any way related to the flood and/or water intrusion, and that the property was "worth less than a comparable property that did not sustain" such an event.

Buyer's agent's affidavit largely duplicated Buyer's. However, Buyer's agent also attested that he had no direct knowledge that the mold's existence was in any way related to the "flood and/or water intrusion event that was resolved by the Hartford[,]" and that, in his opinion, the property was worth less "having been the subject of a substantial flood and/or water intrusion event[.]"

D. Trial Court's Disposition of Seller's Motion for Summary Judgment

The trial court conducted a hearing on the motion and entered an "Order Granting [Seller's] Motion for Summary Judgment as to [Buyer's] Counterclaim[s]." In the order, the court stated that summary judgment was proper because Buyer's counterclaims were premised on an obvious defect. Specifically, the court cited Buyer's testimony that he observed an odor which he thought might be mold before he executed the Purchase Agreement, as well as Buyer's agent's statement that the odor was like that detected in other properties with water intrusion issues. Based on these statements, the court found "no genuine issue of material fact that water intrusion and/or mold issues" were both readily observable and obvious to Buyer, and that Buyer's claims failed as a matter of law.

Seller then filed a motion for final summary judgment, asserting all that remained was its breach of contract claim, and Buyer's two affirmative defenses, which "raise[d] the same issues already addressed" by the previous summary judgment order. The trial court (a successor judge) conducted a hearing on the motion and granted Seller's motion for final summary judgment "as to all remaining claims." The court based its decision upon the predecessor judge's determination "that the alleged defect in the property was obvious to [Buyer]." The court stated it was "not deciding that issue again here (nor stating that it agrees or disagrees with the predecessor Judge on that issue)" and was "unwilling to reconsider the predecessor Judge's ruling on such issue." Buyer timely appealed.

Analysis

"The standard of review of the entry of summary judgment is de novo ." Craven v. TRG-Boynton Beach, Ltd. , 925 So. 2d 476, 479 (Fla. 4th DCA 2006). Under the summary judgment standard in force when Seller's motion was heard,³ "[s]ummary...