Harkless v. Laubhan
2016 Fla. App. LEXIS 18635
Fla. Dist. Ct. App. 6th2016Background
- Harkless leased a 100x100 ft parcel to Verizon (Lease) for annual rent; lease recorded via an Amended Memorandum of Lease.
- In April 2011 Harkless sold ten acres (including the Parcel) to the Lollys; the Harkless–Lolly sales contract handwritten "Additional Terms" expressly stated Harkless would "continue and remain owner" of the easement and Verizon lease payments.
- The April 2011 warranty deed from Harkless to the Lollys did not expressly reserve Harkless’s right to receive rent; it and a later July 2011 deed to the Laubhans recited they were "subject to" the recorded Amended Memorandum of Lease (which did not mention Harkless’s rent reservation).
- The Lollys sold the property three months later to the Laubhans; the Lolly–Laubhan contract noted Buyer had received the lease and survey but did not repeat the Harkless reservation language.
- Harkless sued for declaratory relief and reformation to enforce his reserved right to receive rent; trial court granted summary judgment for the Laubhans. Harkless appealed.
Issues
| Issue | Plaintiff's Argument (Harkless) | Defendant's Argument (Laubhan) | Held |
|---|---|---|---|
| Whether Harkless reserved the right to receive rent | Reservation appears in the Harkless–Lolly contract paragraph 18 and parties so testified | Deeds (April and July) contain no explicit reservation; parol evidence barred by merger | Court: Paragraph 18 did reserve rent; testimony and parties’ stipulation prevent merger into the April deed as a matter of law |
| Whether the reservation merged into subsequent deeds (merger/integration) | Parties to the April deed intended reservation to survive; thus no merger | Merger doctrine: prior agreements merge into the deed, making parol evidence inadmissible | Court: Merger does not apply where parties did not intend integration; genuine factual dispute whether reservation merged prevents summary judgment |
| Whether "subject to" language in deeds creates ambiguity allowing extrinsic evidence | "Subject to" plus reference to recorded memorandum and extrinsic docs supports admissibility of the sales contract | "Subject to" alone cannot defeat clear deed language; deeds and memorandum are unambiguous | Court: "Subject to" does not automatically render the deeds ambiguous here; distinction between easements and right to rent matters; but court did not need to decide ambiguity because non-merger applied |
| Whether subsequent purchasers (Laubhans) are bona fide purchasers for value without notice (recording statute) | Harkless: his rent interest is an intangible property interest covered by recording statute; Laubhans may have had notice preventing BFP status | Laubhans: July deed and recorded memorandum gave no notice of Harkless’s reservation; they lacked notice of the Harkless–Lolly contract | Court: Whether Laubhans were bona fide purchasers without notice is a genuine issue of material fact precluding summary judgment |
Key Cases Cited
- Alderman v. BCI Eng’rs & Scientists, Inc., 68 So.3d 396 (Fla. 2d DCA 2011) (standard for reversal of summary judgment)
- McCoy v. Love, 382 So.2d 647 (Fla. 1979) (bona fide purchaser status is a material factual issue)
- Gray v. Callahan, 197 So. 396 (Fla. 1940) (lessor may expressly reserve rents when transferring a lease)
- Milu, Inc. v. Duke, 204 So.2d 31 (Fla. 3d DCA 1967) (no merger of contract provisions parties did not intend to incorporate into deed)
- Providence Square Ass’n v. Biancardi, 507 So.2d 1366 (Fla. 1987) (parol evidence admissible in reformation when demonstrating true intent)
- Procacci v. Zacco, 324 So.2d 180 (Fla. 4th DCA 1975) ("subject to" language and limits on creating easements by that phrase)
- Stephan v. Brown, 233 So.2d 140 (Fla. 2d DCA 1970) (real estate sales contracts generally merge into deeds absent intent otherwise)
- Bioscience W., Inc. v. Gulfstream Prop. & Cas. Ins. Co., 185 So.3d 638 (Fla. 2d DCA 2016) (contract interpretation follows plain meaning)