Waksman Enterprises, Inc. v. Oregon Properties, Inc.

• Decision Date: 24 September 2003
• Docket Number: No. 2D02-2461.,2D02-2461.
• Citation: 862 So.2d 35
• Parties: WAKSMAN ENTERPRISES, INC., a Florida corporation, Appellant, v. OREGON PROPERTIES, INC., a Florida corporation, and Hill, Ward & Henderson, P.A., a Florida corporation, Appellees.
• Court: Florida District Court of Appeals

862 So.2d 35

WAKSMAN ENTERPRISES, INC., a Florida corporation, Appellant, v. OREGON PROPERTIES, INC., a Florida corporation, and Hill, Ward & Henderson, P.A., a Florida corporation, Appellees.

No. 2D02-2461.

District Court of Appeal of Florida, Second District.

September 24, 2003.

Joel D. Eaton of Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin, P.A., Miami, and Gibbons, Cohn, Neuman, Bello, Segall & Allen, P.A., Tampa, for Appellant.

Roy J. Ford, Jr., Lynn C. Hearn, and Marie A. Borland of Hill, Ward & Henderson, P.A., Tampa, for Appellee Oregon Properties, Inc.

CANADY, Judge.

Waksman Enterprises, Inc. (seller) contracted to sell certain real property to Oregon Properties, Inc. (buyer or purchaser). In connection with the contract, Oregon paid Waksman certain funds as deposits. When the transaction failed to close, Waksman sought a declaratory judgment that it was entitled to retain the deposits. Waksman now appeals the trial court's judgment requiring that all the funds paid as deposits be refunded to Oregon. Because we conclude that under the terms of the contract Oregon was only entitled to be refunded a portion of the deposit monies, we affirm in part and reverse in part.

I. BACKGROUND

The parties entered into a contract in May 2000 for the sale and purchase of a commercial real estate parcel in Tampa. Oregon was simultaneously attempting to acquire the 25,500 square foot parcel from Waksman and three other parcels adjoining it, with the intention of erecting a 14,600 square foot Walgreen's store on the site. Each of the four parcels had a different owner.

A. Contract Provisions

The contract for sale and purchase between Waksman and Oregon provided for a purchase price of $450,000. The contract provided for three categories of deposits: (1) the "Deposit" of $10,000 payable upon execution of the contract; (2) the "Additional Deposit" of $20,000 payable at the conclusion of a ninety-day inspection period after the execution of the contract; and (3) deposits of $10,000 each payable for each of three optional thirty-day extensions of the closing date. The contract also contained provisions relating to governmental approvals, as well as specific conditions to the buyer's obligations.

In order to explain the merits of the arguments raised by the parties concerning the proper interpretation of the contractual provisions relating to the deposit monies, we set forth the pertinent provisions in their entirety. Other than the provision calling for the initial $10,000 "Deposit," the pertinent provisions appear in a contemporaneous addendum (identified as exhibit A) to the form contract executed by the parties.

Paragraph 1 ("Inspection Period") of the addendum provides:

(b) In the event the Purchaser determines, in its sole discretion, that the Property is unsuitable for its needs and gives written notice of same during the [90-day] Inspection Period, then this Agreement shall become null and void. The Deposit and accrued interest shall be returned to Purchaser within five business days. In the event Purchaser elects not to terminate this Agreement within the Inspection Period, then this Agreement shall remain in full force and effect and the transaction shall continue to Closing (as defined below) and the Purchaser shall make an additional $20,000.00 deposit ("the Additional Deposit") and the Deposit and the Additional Deposit shall be non [ ]refundable to Purchaser.

Paragraph 2 ("Closing Date") of the addendum provides for a closing date "within Two Hundred Forty (240) days after the expiration of the [90-day] inspection period or within 10 days of receipt of all applicable building permits whichever occurs first." It places this express obligation on Oregon: "Buyer must apply for and use its best efforts to obtain all necessary building permits during this 240[-]day period." Paragraph 2 also contains a provision for the payment of deposit monies for the extension of the closing date:

Purchaser may elect to extend the closing date for three (3) periods not to exceed Thirty (30) days each, provided that Purchaser deposits Ten Thousand Dollars ($10,000.00) for each Thirty (30) days extension at or before the time each such extension goes into effect. Each deposit is non[ ]refundable to Purchaser and shall apply to the Purchase Price at closing.

Paragraph 5 ("Conditions to Purchaser's Obligations") of the addendum provides in pertinent part:

The obligation of Purchaser hereunder to consummate the Closing contemplated hereby is subject to the satisfaction, as of the Closing, of each of the following conditions (any of which may be waived in whole or part in writing by Purchaser at or prior to Closing):

....

(b) Compliance by Seller. Seller shall have performed, observed [,] and complied with all of the covenants, agreements[,] and conditions required by this Agreement to be performed, observed [,] and complied with by Seller prior to or as of the Closing.

....

(d) Building permit. Buyer shall have procured the necessary building permit for the construction of a 14,600 square foot Walgreens.

Paragraph 6 ("Broker") is followed by an unnumbered paragraph, which constitutes the concluding provision of the addendum:

In the event the conditions set forth above have not been satisfied, Purchaser shall have the right to terminate this Agreement by delivering to Seller a notice in writing of its desire to terminate this Agreement. In such event the Escrow Agent shall return to Purchaser the Deposit and Additional Deposit plus any accrued interest.

B. The Deposit Dispute

Oregon terminated the contract with Waksman in June 2001, when its option to purchase one of the adjoining parcels expired. Thereafter, Oregon opposed Waksman's attempt to collect $50,000 in deposits Oregon had placed in escrow pursuant to the terms of the contract. The $50,000 consisted of the initial $10,000 Deposit, the $20,000 Additional Deposit, and two $10,000 deposits made for extensions of the closing date. Waksman filed the declaratory judgment action against Oregon in August 2001, seeking a declaration as to its entitlement to "the entire $50,000.00 non[ ]refundable deposit, plus interest." Waksman's complaint alleged that "[b]ecause Oregon terminated the contract after the expiration of the inspection period, Waksman [was] entitled to the entire ... deposit," which became nonrefundable pursuant to the express terms of the contract.

Oregon answered the complaint and asserted various affirmative defenses. Oregon denied Waksman's entitlement to any of the funds and asserted a right to the return of all the deposit monies. As its third affirmative defense, Oregon claimed that, because it "was unable to procure the necessary building permit, [it] was acting within its rights under the Contract when it exercised its right to terminate."

Oregon then filed a motion for summary judgment, asserting that there existed no genuine material factual issues and that it was entitled to a summary judgment as a matter of law, because the contract as written required a refund to it of the entire $50,000. Oregon filed the affidavit and supplemental affidavit of the vice president of Oregon, Jeffrey Surrency, in support of its motion. Surrency attested, among other things, that Oregon was entitled to a full refund of all deposits in escrow because the condition set forth in addendum paragraph 5(d) was left unsatisfied when "Oregon determined that it would not be able to obtain a building permit for the project it contemplated." In his supplemental affidavit, Surrency detailed all of the lengthy and expensive steps Oregon took in its effort to secure a building permit. Surrency stated the specific factual basis for Oregon's inability to obtain a building permit:

[O]f the four (4) parcels needed to be combined by Oregon to be able to construct a 14,600 feet [sic] Walgreen's, Oregon was not able to obtain an extension of the sales contract for one (1) of these four (4) parcels. Without all four (4) parcels, it would be impossible to obtain the building permit mentioned in [addendum] Paragraph 5.

Waksman filed the affidavit of its president, Albert Waksman, in opposition to Oregon's summary judgment motion. Mr. Waksman attested that paragraph one of the addendum expressly provided that Oregon's initial $10,000 "Deposit and the Additional [$20,000] Deposit shall be non[ ]refundable to the Purchaser" in the event the purchaser pursued the contract beyond the initial ninety-day inspection period, as was the case here. He further asserted that the two subsequent $10,000 deposits that Oregon paid, respectively, for two thirty-day extensions of the closing were designated "non[ ]refundable" by paragraph 2 of the addendum. Mr. Waksman stated that his company would not have entered into the contract and taken its property off the market for over a year had it not been agreed that the subject deposits would be nonrefundable. However, Mr. Waksman's affidavit acknowledged

[t]hat in order to complete the project contemplated by the contract between Waksman and Oregon, Oregon had to purchase additional property adjoining the property which it had contracted to purchase from Waksman. Oregon's contract with the adjoining property owner expired before it could complete the process of obtaining the necessary building permit, and Oregon was not able to negotiate a contract extension with the adjoining property owner.

A hearing was held on Oregon's summary judgment motion on February 18, 2002. At that hearing, the parties and the trial court agreed that the provision in the contract appearing at the end of the addendum contradicted the two preceding provisions that expressly declared the subject deposits "non[ ]refundable," thus creating an ambiguity. The trial court directed Waksman to submit its own summary judgment motion and directed both parties to submit memoranda indicating whether the ambiguity was patent or latent. The parties and the trial court...