Steinberg v. Bay Terrace Apartment Hotel, Inc., 79-236

• Decision Date: 06 November 1979
• Docket Number: No. 79-236,79-236
• Parties: Peter STEINBERG and Ina Steinberg, his wife, Appellants, v. BAY TERRACE APARTMENT HOTEL, INC., a Florida Corporation, Appellee.
• Court: Florida District Court of Appeals

Page 1089

375 So.2d 1089

Peter STEINBERG and Ina Steinberg, his wife, Appellants, v. BAY TERRACE APARTMENT HOTEL, INC., a Florida Corporation, Appellee.

No. 79-236.

District Court of Appeal of Florida, Third District.

Nov. 6, 1979.

Rehearing Denied Dec. 13, 1979.

Eli Breger, North Miami Beach, for appellants.

Charles L. Neustein, Miami Beach, for appellee.

Before HENDRY, HUBBART and NESBITT, JJ.

HENDRY, Judge.

This cause has previously been the subject of an appeal ¹ whereby this court reversed the trial court's dismissal with prejudice of Mr. and Mrs. Steinberg's complaint seeking rescission of a real estate contract based upon allegations that the vendor had misrepresented or had mistakenly represented that a particular apartment house purchased by the Steinbergs could be used for twenty-three unit efficiency apartments, when, as was later learned by the purchasers, it could be used for only 10 units under the Miami Beach zoning regulations. After remand for further proceedings, the cause evolved into a foreclosure action brought by the vendor/mortgagee on the purchase money mortgage, and a denial of default and a counterclaim for rescission and cancellation by the appellants. ² Ultimately, the trial court entered its order which states in pertinent part:

"The contention of Mr. and Mrs. Steinberg is that the purchase and sale of the Bay Terrace Apartments was based upon the existence of 23 efficiency units, when in fact, there were 10 units.

"Two officials employed by the City of Miami Beach brought zoning files and testified as to the exhibits and violations. Based on exhibits # 1, 2, 3 and A, the Court finds that these matters were of public record and the matters contained therein were neither hidden nor concealed from the purchasers on or before May 4, 1977. The deposit receipt (exhibit 5) specifically refers to zoning violations noticed by the City of Miami Beach prior to May 4, 1977. The Court further finds that the Plaintiff received an occupations license (exhibit C) for 23 units "Peter Steinberg testified that the apartment building is fully rented, except the two lobby-units. He further testified that he voluntarily withheld payment of the mortgage payments due in October, November and December, 1977, but was paid by check dated December 14, 1977 (exhibit 13). These payments made pursuant to stipulation by the attorneys for the parties. The January, 1978 payment was admittedly late (exhibit B) and Bay Terrace Apartment Hotel, Inc. accelerated the note and mortgage balance.

"The testimony of the parties clearly indicated to this Court that both parties are dissatisfied with their relationship and that no equity was presented to forgive the late mortgage payment or deny acceleration and foreclosure of the default . . .

"The Court considered the legal arguments of counsel and the case law cited by the Third District Court of Appeal in their reversal of the Final Order of Dismissal. The greater weight of the evidence does not show a failure of consideration for the purchase of the property due to zoning restrictions which the purchasers knew about . . .

"The Court also finds, the purchase money second mortgage involved herein, secures the real estate, and neither the note nor mortgage require personal guarantees. That the property in the past has suffered waste, and Peter Steinberg's own testimony indicates a hardship in maintaining the property under the present conditions of zoning restrictions.

"WHEREFORE it is ORDERED AND ADJUDGED as follows:

"1. Plaintiff, Bay Terrace Apartment Hotel, Inc., a Florida corporation, is due the following amounts under the note and mortgage sued on in this action.

"2. Plaintiff holds a lien to secure the payment of the total sum against the property described as follows: Lot 24, Block 38, MIAMI VIEW SECTION ISLE OF NORMANDY according to the plat thereof as recorded in Plat Book 34 at Page 80 of the Public Records of Dade County, Florida, together with the building and improvements thereon, located at 1995 Bay Drive, Miami Beach, Florida, and together with the furniture, furnishings and equipment located therein, which lien is prior, paramount and superior to all rights, claims, liens, interests, encumbrances and equities of all defendants, and all persons, firms and/or corporations claiming by, through, under or against the said defendant or any of them, and the property will be sold free and clear of any claims of the said defendants.

"3. If the total sum with interest at the rate prescribed by law and all costs of this action accruing subsequent to this Judgment are not paid within three (3) days from this date, the Clerk of this Court shall sell the property at public sale . . .

"5. On filing the certificate of title the clerk shall distribute the proceeds of the sale, so far as they are sufficient by paying: first, all of receivers fees, costs and attorney's fees, second, documentary stamps affixed to the certificate; third, plaintiff's costs and attorney's fees; fourth, the total sum due to plaintiff less the items paid plus interest at the rate prescribed by law from this date to the date of the sale; and by retaining any amount remaining pending the further order of this Court . . .

"10. The defendants take nothing by their counterclaim, and the relief sought to rescind the purchase and sale of the property and cancel the mortgage and note is denied."

Appellants have raised two points on appeal, contending that the trial court erred in its rulings because (1) the buyer of an apartment building represented to contain twenty-three rentable units is entitled to rescind the transaction after the closing when it is discovered that it contains only 10 rentable units, and (2) under the facts of the case, it was inequitable to permit acceleration of the promissory note and foreclosure of the mortgage securing the note.

As to the first point, we refer to the oft-quoted, well-settled, broad generalization that a person to...