N & C Properties v. Vanguard Bank and Trust Co.

• Decision Date: 22 January 1988
• Docket Number: No. BT-121,BT-121
• Citation: 13 Fla. L. Weekly 258,519 So.2d 1048
• Parties: 13 Fla. L. Weekly 258 N & C PROPERTIES, Appellant, v. VANGUARD BANK AND TRUST COMPANY, Appellee.
• Court: Florida District Court of Appeals

Page 1048

519 So.2d 1048

13 Fla. L. Weekly 258

N & C PROPERTIES, Appellant, v. VANGUARD BANK AND TRUST COMPANY, Appellee.

No. BT-121.

District Court of Appeal of Florida,

First District.

Jan. 22, 1988.

Rehearing Denied March 4, 1988.

Douglas A. Hutcheson, of Douglas A. Hutcheson, P.A., Mary Esther, for appellant.

Richard H. Powell, of Richard H. Powell, P.A., and Bobby L. Whitney, Jr., of Chesser, Wingard, Barr & Townsend, Ft. Walton, for appellee.

JOANOS, Judge.

N & C Properties appeals from a final judgment which, among other things, determined that an Alabama order rendered against it was a final judgment, and which ordered the distribution of some assets that had been in escrow. Appellant raises the following issues, partially restated, for our review: I. Whether the trial court erred by granting interpleader and distributing the interplead assets all in one hearing without crossclaims or counterclaims being filed II. Whether the trial court erred by determining that proper notice of a final hearing was given of all issues including both stages of interpleader, and on a separate case not yet consolidated; III. Whether the trial court erred by ruling that the assignee of proceeds held in escrow was not an indispensable party to an interpleader action on those proceeds; IV. Whether the trial court erred by requiring appellant to post a bond in Florida after posting a bond in the state of Alabama; and V. Whether the trial court erred by allowing the buyers to seek recovery of their escrow money through the Florida courts after they had pursued a money judgment for the same funds in the state of Alabama. We affirm on all points.

Appellant, N & C Properties, is a joint venture consisting of a Florida corporation and an Alabama corporation. Appellee, Vanguard Bank and Trust Company will be referred to as "escrow agent," and Donald L. and Kathy D. Johnson, Alton O. Foster, and Charles D. Pritchard shall be referred to jointly as "buyers."

This case involves the preconstruction purchase of condominium units located in Okaloosa County, Florida. Buyers signed purchase agreements and made deposits on various units of the condominium complex being developed by N & C. The buyers contracted with N & C to buy three units and deposited $88,320.00 in letters of credit, which were placed with the escrow agent pursuant to an escrow agreement. Buyers are all residents of Alabama.

Buyers began legal proceedings in Alabama to void their contracts pursuant to section 718.503 and section 718.202, Florida Statutes, which allow a contract to be voided where the purchasers are not provided with condominium documents. On June 20, 1986, the Alabama court granted buyers' motion for summary judgment, rescinded the purchase agreements between the parties and awarded money judgments in an amount equal to all funds paid under the letters of credit. The developer, appellant, appealed the Alabama trial court's decision but did not obtain a supersedeas bond.

The buyers filed suit in Florida, seeking to make their Alabama judgment a Florida judgment and to execute on it. N & C filed a petition to stay enforcement of the foreign judgment, pursuant to section 55.509, Florida Statutes. The escrow agent that was holding the deposits, filed an action in interpleader in the Circuit Court of Okaloosa County, joining N & C and buyers as defendants.

The trial court denied N & C's motion to dismiss the interpleader proceeding, finding that interpleader was proper. The interpleader action was then set for final hearing. All parties filed a stipulation that both cases should be consolidated.

On February 2, 1987, after the final hearing, the court in its order found that the escrow agent was entitled to interplead and be discharged from further liability, and that the buyers were entitled to the funds held in escrow. Pursuant to a written stipulation of all parties, the court granted N & C's motion to consolidate both cases. Also, the court denied N & C's motion to dismiss, ordered the escrow agent to deposit its escrow funds into the registry of the court, and ordered the clerk to disburse the funds to the buyers. The trial court also denied N & C's petition to stay enforcement of the Alabama judgment, and enjoined both N & C and buyers from instituting any further actions concerning the escrow fund. Finally, the trial court ordered that the foreign judgment be recorded in the Official Records Book, "for which let execution issue." Thereafter, N & C filed a supersedeas bond before the Alabama court in the Alabama proceedings. Later the trial court denied N & C's motion for rehearing and required N & C to provide a supersedeas bond in the Florida proceedings during the appeal. N & C obtained the supersedeas bond and appealed.

N & C correctly asserts that interpleader is a two stage "action." However, there is no rule that demands two separate proceedings be held to complete an interpleader action. The first stage is a determination as to the propriety of the interpleader. If the stakeholder has no interest in the fund and no independent liability is asserted against him, an order of interpleader must be entered. Trawick, Jr., H., Trawick's Florida Practice and Procedure, § 37-11, (1986). Further, as the buyers contend, the record reveals that the trial judge first determined that interpleader was proper when he considered the buyers' and N & C's motions to dismiss the interpleader action. The trial court denied both motions.

In the second stage of interpleader the defending parties usually litigate their claims to the escrow assets by cross-claims among themselves. However, given the circumstances of this case, where a sister state has already determined which of the parties in the suit is entitled to the escrowed funds, the counterclaim and cross claim requirements are moot. The Alabama judgment rescinded the contracts between the buyers and N & C, because N & C did not comply with prospectus and disclosure requirements, and controlled the disbursement of the escrow assets. This ruling was consistent with Florida condominium law, where, as buyers contend, if a buyer properly terminates the contract pursuant to its terms or the chapter, the escrow funds shall be paid to the buyer together with any interest earned. See section 718.202(1)(a), Florida Statutes.

N & C's argument, that it did not know what position the buyers were taking in claiming the funds here below because buyers did not file counterclaims or cross claims, is therefore without merit. N & C was the defendant in the suit the buyers filed in Alabama, and the Alabama court's order and opinion finding for the buyers was directed toward N & C, therefore N & C was aware of the grounds on which the buyers were seeking to collect the escrowed funds in the trial court here. The only reason the earnest money wasn't distributed by the Alabama court was that, although the escrow agent was named in the Alabama lawsuit, it was not served and made a party to the suit. We find that the trial court did not err in granting interpleader and distributing the funds at the hearing held February 2, 1987.

N & C correctly contends that buyers' Notice for Trial, and the court's order dated October 6, 1986, setting trial for February 2, 1987, only referred to the interpleader action, case number 86-2330, and did not mention case number 86-3015. However, less than three weeks after the trial court issued its order setting the case for trial, N & C filed a motion...