PRINCETON HOMES INC. v. MORGAN, 4D09-958.

• Decision Date: 09 June 2010
• Docket Number: No. 4D09-958.,4D09-958.
• Citation: 38 So.3d 207
• Parties: PRINCETON HOMES, INC., Appellant, v. Christine M. MORGAN, Appellee.
• Court: Florida District Court of Appeals

38 So.3d 207

PRINCETON HOMES, INC., Appellant,

v.Christine M. MORGAN, Appellee.

No. 4D09-958.

District Court of Appeal of Florida,Fourth District.

June 9, 2010.

L. Louis Mrachek, Alan B. Rose and Brad McPherson of Page, Mrachek, Fitzgerald & Rose, P.A., West Palm Beach, for appellant.

Rachel Studley of Wicker, Smith, O'Hara, McCoy & Ford, P.A., West Palm Beach, for appellee.

TAYLOR, J.

Princeton Homes, the seller under an agreement for the purchase and sale of a townhome, appeals an adverse summary judgment in the buyer's action for recovery of a $30,000 deposit made for the purchase of the townhome. In entering summary judgment, the trial court concluded that the buyer, Christine Morgan, had the right to void her contract for the purchase of a townhome from Princeton Homes because she did not receive a disclosure summary under section 720.401, Florida Statutes. We affirm, concluding that the trial court properly entered summary judgment in the buyer's favor.

We state the facts in the light most favorable to Princeton Homes. In early 2006, Morgan executed a revised purchase agreement in which she agreed to purchase a townhome for $289,900 from Princeton Homes. Pursuant to the contract, Princeton Homes was to construct the townhome in a community known as St. Andrews Park. The breakdown of the contract price was $59,000 for the lot and $230,900 for the completed townhome. Morgan ultimately paid a total of $30,000 as a deposit on the contract.

Paragraph 15 of the contract explained that the townhome was part of a homeowner's association (“HOA”). Paragraph 15 provided, in relevant part: “As with most planned unit developments, St. Andrews Park has a property owners' association (the ‘POA’) which is responsible for the maintenance and upkeep of the community and its facilities, and which assesses each homeowner in advance on a quarterly basis.” However, it is undisputed that Morgan never received a disclosure summary pursuant to section 720.401, Florida Statutes.

A corporate representative of Princeton Homes testified during a deposition that Princeton Homes was not the developer of St. Andrews Park, but was merely a builder. At the time the contract was entered into, Princeton Homes did not own the property. ¹ Instead, according to Princeton Homes, another entity, Saint Andrews Park, LLC, was actually the developer and owner of the subject property at the time the contract was executed. At some point after Morgan executed the contract with Princeton Homes, Princeton Homes took title to the property and began constructing the townhome.

In November 2007, before Princeton Homes completed construction of the home, Morgan sent Princeton Homes written notice demanding the refund of her $30,000 deposit and advising Princeton Homes that she was voiding the contract. In response, Princeton Homes refused to refund the deposit, but offered to eliminate the HOA assessment.

Morgan then filed suit against Princeton Homes, seeking a return of her deposit on the ground that she did not receive a disclosure summary pursuant to the requirements of section 720.401. Princeton Homes answered and filed a counter-claim for breach of contract and specific performance. After discovery was completed, Morgan moved for summary judgment on her claim to recover the earnest money deposit.

At the hearing on the motion for summary judgment, the trial court noted that there was no dispute that Morgan was not given the disclosure summary required by section 720.401. The trial court concluded that because Morgan was never provided with the required disclosure summary under section 720.401, and because the closing on the property had not occurred, Morgan had the right to void the contract under the statute. Accordingly, the trial court entered a final summary judgment in Morgan's favor, awarding her the return of the $30,000 deposit together with interest. Princeton Homes now appeals.

The standard of review of an order granting summary judgment is de novo. See Fla. Bar v. Greene, 926 So.2d 1195, 1200 (Fla.2006). When reviewing an order granting summary judgment, an appellate court must examine the record in the light most favorable to the non-moving party. Allenby & Assocs., Inc. v. Crown St. Vincent Ltd., 8 So.3d 1211, 1213 (Fla. 4th DCA 2009). Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fla. R. Civ. P. 1.510(c). “[T]he burden is upon the party moving for summary judgment to show conclusively the complete absence of any genuine issue of material fact.” Albelo v. S. Bell, 682 So.2d 1126, 1129 (Fla. 4th DCA 1996).

On appeal, Princeton Homes primarily argues that it had no obligation to provide a disclosure summary under section 720.401 because it was neither the owner nor the developer of the property at the time it entered into the contract with the purchaser. In addressing this argument, we begin with an examination of the statute.

Section 720.401, Florida Statutes, sets forth certain disclosures that must be provided to prospective purchasers of residential parcels subject to a requirement of membership in a homeowners' association. Section 720.401(1)(a) provides that “[a] prospective parcel owner in a community must be presented a disclosure summary before executing the contract for sale.” The disclosure summary must be in a form substantially similar to a form provided in the statute. § 720.401(1)(a), Fla. Stat. (2005). After setting out the disclosure summary form, section 720.401(1)(a) states the following:

The disclosure must be supplied by the developer, or by the parcel owner if the sale is by an owner that is not the developer. Any contract or agreement for sale shall refer to and incorporate the disclosure summary and shall include, in prominent language, a statement that the potential buyer should not execute the contract or agreement until they have received and read the disclosure summary required by this section.

§ 720.401(1)(a), Fla. Stat. (2005) (emphasis added).

Section 720.401(1)(b) provides:

(b) Each contract entered into for the sale of property governed by covenants subject to disclosure required by this section must contain in conspicuous type a clause that states:

IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401, FLORIDA STATUTES, HAS NOT BEEN PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE, THIS CONTRACT IS VOIDABLE BY BUYER BY DELIVERING TO SELLER OR SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS FIRST. ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT. BUYER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING.

Section 720.401(1)(c), in turn, provides:

(c) If the disclosure summary is not provided to a prospective purchaser before the purchaser executes a contract for the sale of property governed by covenants that are subject to disclosure pursuant to this section, the purchaser may void the contract by delivering to the seller or the seller's agent or representative written notice canceling the contract within 3 days after receipt of the disclosure summary or prior to closing, whichever occurs first. This right may not be waived by the purchaser but terminates at closing.

§ 720.401(1)(c), Fla. Stat. (2005).

As noted above, section 720.401(1)(a) includes language providing that “the disclosure must be supplied by the developer, or by the parcel owner if the sale is by an owner that is not the developer.” (Emphasis added). Princeton Homes seizes upon this language, arguing that the statute did not require it to provide a disclosure summary because it was neither the developer ² nor the parcel owner at the time the contract was executed. This case presents a somewhat unusual situation because here the prospective seller of the townhome did not become the owner of the property until after it executed the contract for sale with the prospective buyer. However, as the trial court recognized, the resolution of this case does not depend upon whether Princeton Homes itself had the duty to provide the disclosure summary to Morgan.

Legislative intent is the polestar...