San Francisco Distribution Center, LLC v. Stonemason Partners, LP
183 So. 3d 391
Fla. Dist. Ct. App.2014Background
- San Francisco Distribution entered a Jan 2012 contract to buy a Miami Beach property for $5,250,000 with a 45-day close and a $400,000 deposit held in escrow.
- The contract allowed either liquidated damages or specific performance if the buyer defaulted; 50% of any forfeited deposits would go to brokers.
- San Francisco Distribution’s broker, Thomas Martino, also served as closing agent.
- San Francisco Distribution failed to close; Stonemason demanded the $400,000 as liquidated damages but was told by Martino the deposit had been returned.
- Stonemason sued San Francisco Distribution and Martino; all counts except breach of contract were dismissed.
- The trial court granted summary judgment for Stonemason for $400,000 plus interest, fees, and costs; on appeal, the court reviews de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the liquidated damages clause is enforceable given the option between damages and specific performance. | San Francisco Distribution argues Lefemine v. Baron makes the clause unenforceable. | Stonemason contends the clause remains enforceable despite the alternative remedies. | Enforceable; alternative remedies do not render it unenforceable. |
| Whether the clause is unconscionable because the property later sold for more than the contract price. | San Francisco Distribution argues no damages since a subsequent sale occurred at a higher price. | Stonemason argues that damages are determined at contract time, not at resale price. | Not unconscionable; later sale amount does not defeat the liquidated damages provision. |
Key Cases Cited
- Lefemine v. Baron, 673 So.2d 326 (Fla. 1991) (sets framework for enforceability of liquidated damages when alternative remedies exist)
- Hyman v. Cohen, 73 So.2d 393 (Fla.1954) (distinguishes forfeiture vs. penalty in damages liquidations)
- Pappas v. Deringer, 145 So.2d 770 (Fla.3d DCA 1962) (forfeiture deemed penalty when it substitutes damages with option to pursue greater damages)
- Cortes v. Adgir, 494 So.2d 523 (Fla.3d DCA 1986) (early application distinguishing liquidated damages vs. penalty in real estate contracts)
- Mineo v. Lakeside Village of Davie, LLC, 983 So.2d 20 (Fla.4th DCA 2008) (rejects Lefemine limitation; upholds enforceability of forfeiture where specific performance option exists)
- Hot Developers, Inc. v. Willow Lake Estates, Inc., 950 So.2d 537 (Fla.4th DCA 2007) (upholds forfeiture clause despite higher subsequent sale price under similar facts)
- Bradley v. Sanchez, 943 So.2d 218 (Fla.3d DCA 2006) (deems deposit forfeiture reasonable despite higher post-default sale price)