Orpheus Investments, S.A. v. Ryegon Investments, Inc.

• Decision Date: 18 October 1983
• Docket Number: No. 83-79,83-79
• Citation: 447 So.2d 257
• Parties: ORPHEUS INVESTMENTS, S.A., Appellant, v. RYEGON INVESTMENTS, INC., a Florida corporation, and Rigo Investments, Inc., a Florida corporation, in their corporate capacity and doing business as Champlain Towers North Associates, a Florida general partnership, Appellees.
• Court: Florida District Court of Appeals

Page 257

447 So.2d 257

ORPHEUS INVESTMENTS, S.A., Appellant, v. RYEGON INVESTMENTS, INC., a Florida corporation, and Rigo Investments, Inc., a Florida corporation, in their corporate capacity and doing business as Champlain Towers North Associates, a Florida general partnership, Appellees.

No. 83-79.

District Court of Appeal of Florida Third District.

Oct. 18, 1983.

Fine, Jacobson, Block, Klein, Colan & Simon and Mitchell R. Bloomberg, Daniel Retter, Miami, for appellant.

Buchbinder & Elegant, P.A., and Harris J. Buchbinder, Miami, for appellees.

Before SCHWARTZ, C.J., and DANIEL S. PEARSON and JORGENSON, JJ.

JORGENSON, Judge.

This appeal presents the question of whether the trial court properly applied the limitation of action period to time bar a complaint filed pursuant to the Interstate Land Sales Full Disclosure Act. In light of the facts and applicable law we find that the trial court did not err and, therefore, affirm.

On January 30, 1980, Orpheus Investments contracted to purchase a condominium from Ryegon Investments and Rigo Investments. It is alleged that at the time the contract of sale was entered into Ryegon and Rigo had failed to comply with certain requirements of the Interstate Land Sales Full Disclosure Act [of 1968], Pub.L. No. 90-448, §§ 1401-22, 82 Stat. 590-99 (1968) (current version at 15 U.S.C. §§ 1701-20 (1982)) [hereinafter cited as 1968 Act], thereby bestowing upon Orpheus the option of equitable relief from the contract, see 1968 Act §§ 1404, 1410. On May 15, 1980, Orpheus made the last of multiple deposit payments required by the contract of sale. Contained within the 1968 Act as these events occurred, and enacted contemporaneously with the other provisions of the 1968 Act, was a two-year limitation of action period. See 1968 Act § 1412. On June 21, 1980, however, certain amendments to the 1968 Act became effective, see Housing and Community Development Amendments of 1979, Pub.L. No. 96-153, §§ 401-10, 93 Stat. 1122-32 (1979) (codified in current version at 15 U.S.C. §§ 1701-20 (1982) [hereinafter cited as 15 U.S.C.], including an amendment which increased the applicable limitation of action period to three years, see 15 U.S.C. § 1711. On May 7, 1982, Orpheus began an action for rescission of the contract of sale, invoking in its complaint "15 U.S.C. § 1701 et seq." Ryegon and Rigo's motion to dismiss the complaint on the ground that it was filed more than two years after the formation of the contract of sale was granted.

Orpheus argues that its complaint was timely because (1) the limitation of action period did not begin to run until May 15, 1980, when the last deposit payment was made and (2) if the limitation of action period did begin to run on January 30, 1980, the amendment increasing the limitation of action period from two to three years should be applied retroactively to include Orpheus's cause of action although it arose prior to the effective date of the amendment.

When an action founded upon a congressionally-created right is brought in a state court, as is the case here, the state court will apply the relevant federal statute of limitation along with the federal rules on tolling and other ancillary matters. See Burnett v. New York Central Railroad, 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965); Engel v. Davenport, 271 U.S. 33, 46 S.Ct. 410, 70 L.Ed. 813 (1926); Mayfield v. Richards, 115 U.S. 137, 5 S.Ct. 1187, 29 L.Ed. 334 (1885); Mitchell v. Clark, 110 U.S. 633, 4 S.Ct. 170, 28 L.Ed. 279 (1884); 51 Am.Jur.2d Limitation of Actions § 75 (1970); 10 Fla.Jur.2d Conflict of Law § 49 (1979).

The 1968 Act, which was in effect during the period of January 30 to May 15, 1980 (on one of which dates, it is alleged, the limitation of action period began to run), created a new right of action not available at common law, a right of action upon which Orpheus rests its complaint. The 1968 Act provides that failure to comply with those requirements of the 1968 Act which Ryegon and Rigo allegedly failed to comply with constitutes an actionable violation of the 1968 Act if the compliance does not occur "in advance of the signing of any contract or agreement for sale," 1968 Act § 1404(a)(1). By the language of the 1968 Act, the violations Orpheus complains of are of such a nature that they can only occur, they in fact spring into being, at the moment the contract of sale is entered into. The omissions become such at the moment of contract formation, not at some later moment of contract fulfillment. The alleged violations upon which Orpheus based its complaint occurred, if at all, on January 30, 1980, when the contract of sale was entered into, and not on May 15, 1980, when Orpheus made its last deposit payment. The two-year limitation of action period, therefore, began to run on January 30, 1980. See also Aldrich v. McCulloch Properties, Inc., 627 F.2d 1036 (10th Cir.1980) (limitation of action period of the 1968 Act begins to run upon contract formation), and the cases cited therein; H.R.Rep. No. 96-706, 96th Cong., 1st Sess. 88, reprinted in 1979 U.S.Code Cong. & Ad.News 2402, 2447 (explaining the 1979 amendment as enacted and rejecting an earlier version of the amendment which would have delayed the beginning of the limitation of action period until the last payment on the contract of sale or until conveyance of the deed, whichever occurred first).

The question remaining is whether, once the two-year limitation of action period began to run, the subsequent extension of the limitation of action period to three years retroactively included the already running period, that is, whether the amendment "applies to causes of action that were in existence at the time the amendment became effective," Wisbey v. American Community Stores Corp., 288 F.Supp. 728 (D.Neb.1968). ¹ Wisbey contains the most recent and the only extensive survey of this issue from a federal perspective. Limitation of action periods, Wisbey tells us, may be divided into two categories: those that affect the right of action and those that affect merely the remedy which is sought in bringing the action. The former are distinguishable from the latter in that they attack not the remedy, but the right, and are a condition of liability itself. Id. at 732. This comparatively rare breed of limitation of action period...