Mendez v. Land Investors, Corp., Case No. 2:12-cv-158-FtM-29UAM
| Decision Date | 08 January 2014 |
| Docket Number | Case No. 2:12-cv-158-FtM-29UAM |
| Parties | FLORENCE MENDEZ, Plaintiff, v. LAND INVESTORS, CORP., a Florida Corporation, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
FLORENCE MENDEZ, Plaintiff,
v.
LAND INVESTORS, CORP., a Florida Corporation, Defendant.
Case No. 2:12-cv-158-FtM-29UAM
UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA FORT MYERS DIVISION
Dated: January 8, 2014
The matter is before the Court on plaintiff's four (4) count Complaint (Doc. #1) against defendant asserting violation of the Interstate Land Sales Full Disclosure Act (ILSFDA) (Count I) and state law claims for fraudulent misrepresentation (Count II), negligent misrepresentation (Count III), and false information negligently supplied for the guidance of others (Count IV). The Court conducted a bench trial, and the parties thereafter each submitted a post-trial memorandum (Docs. ## 75, 76, 77). The Court will address the federal ILSFDA claim first, and then the three fraud related state law claims.
I. Interstate Land Sales Full Disclosure Act (ILSFDA) Claim
The Court makes the following findings of facts and conclusions of law related to plaintiff's ILSFDA claim:
A. Land Investors Corporation
Defendant Land Investors Corp. (defendant or Land Investors) is a Florida corporation whose primary business is real estate
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investment in Southwest Florida. These investments typically involved the purchase of vacant lots, which were resold to the public in Europe for a profit to Land Investors. At all relevant times, Jean-Claude Giger (Giger) was president of Land Investors.
The Port Charlotte Subdivision is a series of platted lots located in Charlotte County, Florida. It was originally developed in 1959 by General Development Corporation and consisted of approximately 113,000 platted lots. On various dates from January 2008 through October 2012, Land Investors acquired and then re-sold lots within the Port Charlotte Subdivision. Between these dates, Land Investors bought a total of 535 lots, re-selling most of them (519 lots) to investors in France.
Land Investors also owned Florida real property outside the Port Charlotte Subdivision, which was bought and sold in a similar manner.
B. Sales of Port Charlotte Subdivision Lots in France
Land Investors sold vacant lots in the Port Charlotte Subdivision to persons or entities in France through referrals from independent real estate/investment agents who would receive a commission upon the sale of a lot. During the relevant time period, Giger represented Land Investors in France and supervised the sale of the Land Investors' lots through over forty such independent agents. These agents included Armand Aznavourian (Aznavourian) and Guy Zimmer (Zimmer), each of whom was an agent of
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Land Investors for the transactions in which each was involved. Charles Astouric (Astouric) served as the attorney/advisor for Land Investors in connection with the lot sales to plaintiff.
There is no evidence of any advertizing or sales promotions by Land Investors to the general public, either in the United States or in France. The description of the sales process in France comes largely from the testimony of Aznavourian and some stipulated facts. Aznavourian testified at trial that he has been a real estate broker in France for approximately twenty years. In 2008 and 2009, he was an independent broker working on a commission basis. From January 2008 through March 2009, Aznavourian sold over eighty Port Charlotte Subdivision lots owned by Land Investors to persons residing in France. Joint Exhibit 10. In all, Aznavourian sold 170 lots and Zimmer sold 62 lots in the Port Charlotte Subdivision. (See Doc. #75, pp. 10, n.13, 15 for record citations.)
The parties stipulated that Land Investors would provide lists of the properties in its portfolio to real estate brokers in Europe. These brokers would receive a commission upon the sale of a lot by Land Investors. Aznavourian described the marketing and sales process in France as follows: Giger would manage the sales activities from his office in France, and controlled which particular lots were made available for sale. From time to time, Giger would provide a list of 12 to 15 Port Charlotte Subdivision
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lots owned by Land Investors which could be sold. Typically, when nearly all of the lots on one list were sold, Land Investors would purchase new lots in the subdivision and Giger would provide Aznavourian with a new list. Once Aznavourian had the list, it was up to him to find people to purchase the properties. To help find purchasers, Aznavourian would use property management advisors whose companies advertised in the phone book and who had clients who may be interested in purchasing the properties. Aznavourian would provide the lists of available lots to such property advisors. The price for each lot was set by Land Investors and was contained on the inventory lists provided by Giger. The lots were sold pursuant to a form sales contracts printed in Miami, Florida. The money paid by the purchaser was payable to Land Investors, and Giger would send the signed contract and money to Florida, where it was processed. A title company would issue a deed and a title insurance policy. Giger controlled the entire process in France, including whether to accept a reduced sale price.
C. Florence Mendez Transactions
While some factual details of the lot sales to plaintiff Florence Mendez (plaintiff or Mendez) are disputed, certain basic facts are clearly established. After selling inherited real property in 2009 for 215,000 Euros (approximately $279,000), Mendez decided to invest the money in anticipation of retirement. Mendez asked her real estate agent how to buy property abroad, and was
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told to look in the yellow pages of the phone book and contact an investment agency. In about March 2009, plaintiff did so, ultimately speaking with Zimmer. Mendez eventually purchased a total of ten vacant lots in the Port Charlotte Subdivision. The first five lots were by separate contracts signed on March 17, 2009; the next five lots were by a single contract signed on April 15, 2009, which was followed up by five separate contracts signed by Mendez on April 16, 2009. Joint Exhibit 10, Tabs 92-96. The parties stipulated to the substance of the information set forth in the chart below.
| Property Address |
Land Investors Purchase Date |
Land Investors Purchase Price |
Mendez Purchase Contract Date |
Mendez Purchase Price |
| 3477 Yarrow St |
1/1/09 |
$30,000 (for 4 lots, $7,500 average) |
3/17/09 |
$26,900 |
| 4389 McLean St |
12/19/08 |
$22,000 (for 4 lots, $5,500 average) |
3/17/09 |
$26,900 |
| 12204 Kelley Ave |
11/1/08 |
$7,900 |
3/17/09 |
$26, 900 |
| 12100 Grady Ave |
6/10/08 |
$76,000 (for 8 lots, $9,500 average) |
3/17/09 |
$26,900 |
| 12068 Karney Ave |
4/21/08 |
$8,500 |
3/17/09 |
$26, 900 |
| 4567 Opel Ter |
4/13/09 |
$41,300 (for 6 lots, $6,883 average) |
4/15/09 |
$124,000 for this and four lots below, $24,800 average |
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| 12442 Mayer Ter |
4/13/09 |
$41,300 (for 6 lots, $6,883 average) |
4/15/09 |
$24,800 average |
| 12419 Hathaway Ter |
4/13/09 |
$41,300 (for 6 lots, $6,883 average) |
4/15/09 |
$24,800 average |
| 12356 Hathaway Ter |
4/13/09 |
$41,300 (for 6 lots,$6,883 average) |
4/15/09 |
$24,800 average |
| 4177 Pilgrim St |
10/22/08 |
$29,000 (for 4 lots,$6,883 average) |
4/15/09 |
$24,800 average |
Joint Exhibits 1, 2.
The individual Contracts for Sale and Purchase, Joint Exhibit 2-A through E,...
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