CRC 603, LLC v. North Carillon, LLC
77 So. 3d 655
Fla. Dist. Ct. App.2011Background
- Consolidated appeals challenge the sufficiency of claims under § 718.202(2006) regarding pre-closing deposits in a North Carillon Beach condo project.
- Two Nevada single-asset LLCs bought units N-603 and N-1103; deposits exceeded $176,000 on each $1+ million contract.
- Pre-2006 statute required a 10% escrow and additional funds held in a separate escrow for deposits in excess of 10%.
- Double AA International Investment Group held that two separate escrow accounts were required for deposits under § 718.202(1) and (2).
- In 2010, the legislature amended § 718.202(11) to allow one or more escrow accounts with separate accounting, purportedly clarifying prior law.
- The trial court dismissed buyer claims against the escrow agent; buyers alleged voidability of contracts for noncompliance and sought deposits; court reversed in part and remanded on prior-law analysis, affirming against the escrow agent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 718.202 required separate escrow accounts for 10% and excess deposits (2006 law). | Double AA control requires two separate accounts for deposits. | No; a single account with separate accounting satisfies § 718.202(1)-(2). | Retroactivity/clarification concerns bar applying the 2010 amendment; prior rule required separate accounts. |
| Whether the 2010 amendment (§ 718.202(11)) applies retroactively to 2006 contracts and 2009 claims. | 2010 amendment clarifies existing law and should apply. | Amendment impairs vested contract rights and cannot apply retroactively. | Amendment cannot be retroactively applied to pre-amendment contracts. |
| Whether the amendment changes the legal analysis of Double AA for these cases. | Double AA remains controlling; separate accounts required. | Amendment alters the governing framework. | Double AA governs pre-amendment rights; amendment not retroactive to disturb that result. |
| Whether the escrow agent can be liable under § 718.202(5) for using funds in a single account. | Failure to maintain separate accounting voids contracts and returns deposits. | Escrow agent not liable; statute does not authorize private action against agent. | No private action against escrow agent; claims against agent affirmatively dismissed; buyer claims reversed against developer. |
Key Cases Cited
- Double AA Int’l Inv. Group, Inc. v. Swire Pac. Holdings, Inc., 674 F.Supp.2d 1344 (S.D. Fla. 2009) (held two separate escrow accounts were required for deposits under § 718.202(1)-(2))
- Double AA Int’l Inv. Group, Inc. v. Swire Pac. Holdings, Inc., 637 F.3d 1169 (11th Cir. 2011) (affirmed in part, vacated in part; discussed separate accounting and retroactivity concerns)
- Brickell Bay Club v. Ussery, 417 So.2d 692 (Fla. 3d DCA 1982) (all statutes in effect upon date of contract form part of contract)
- Ramcharitar v. Derosins, 35 So.3d 94 (Fla. 3d DCA 2010) (gap-filling and retroactivity considerations for amendments)