Appalachian, Inc. v. OlsonAppalachian, Inc. v. Olson
Charles P. Schropp and Mark P. Buell of Shackleford, Farrior, Stallings & Evans, P.A., Tampa, for appellants Commander, Legler, Werber, Dawes & Sadler, P.A., and Lawyers Professional Liability Ins. Co.
Steven J. Chase and Terri Jayne Salt of Drymon, Bennett & Chase, P.A., Sarasota, for appellee Olson.
David J. Baron of Fergeson, Skipper & Shaw, Keyser, Baron & Tirabassi, P.A., and Johnson S. Savary of Kirk, Pinkerton, Savary, Carr & Strode, P.A., Sarasota, for appellees Ackmann, et al.
OTT, Judge.
This appeal is from a summary judgment wherein the trial court granted rescission of certain contracts to purchase condominium units. The trial court found that the federal Interstate Land Sales Full Disclosure Act,
The Act is aimed at protecting purchasers from abuse by real estatе developers through interstate commerce and the use of the mails in the promotion and sale of properties offered as part of a common
Appellants are developers of a condominium project, along with other interestеd parties. The developers entered into contracts to sell individual condominium units under construction to appellees. The developers failed to supply the required рroperty report. Appellees made earnest money deposits of varying amounts as provided in the contracts. The contracts contained no provision requiring the developers to complete construction by any definite date. The units were completed, and appellees received notification that appellants werе ready to close well within two years of the execution of the contracts. Appellees thereupon elected to revoke their contracts and filed suit to enforce their rights under the Act, which resulted in the aforementioned summary judgment.
We first discuss the threshold issue of whether the Act applies to the sale of condominiums. We hold that it does. This issue was addressed in Nargiz v. Henlopen Developers, 380 A.2d 1361 (Del. 1977). Although recognizing a lack of court decisions addressing this point, the Supreme Court of Delaware noted that the federal body in charge of administering the Act, the Office of Interstatе Land Sales Registration (“OILSR“), had consistently applied the Act to condominiums. Id. at 1363. See also 38 C.F.R. 170 (1973).
We next address the question of whether the sales transactiоn here is for the sale of improved land. If it is, the transaction is exempted from the requirements of the Act by
For purposes of the Act, a sale occurs when “a purchaser has entered into any obligation or agreement for consideration....” Aldrich v. McCulloch Properties, Inc., 627 F.2d 1036 (10th Cir.1980). See also 44 C.F.R. § 24011 (1979). Hence, sale occurs when an agreement or contract is executed and not when the completed condominium unit is conveyed. A holding that a sale occurs only upon the conveyance of the completed unit would result in the Act not applying to condominium sales in Florida. Such a result is contrary to the interpretation and aрplication of the Act by OILSR for more than a decade.
In Nargiz, the Supreme Court of Delaware was faced with arguments similar to those urged by appellants in the present case. Our hоlding is in accord with that of the Delaware court.
The developers pled the equitable affirmative defenses of estoppel, lachеs, and unclean hands in response to the action for rescission. The trial court ruled that these defenses, if proven, would not bar appellees’ rights under the Act. To support these affirmative defenses, the developers asserted that each appellee had represented to the developers that he or she would purchase a unit and thаt in reliance thereon the developers removed each contracted unit from the market. Later, when the developers were informed that the appellees intended to rescind based on the Act, market demand had diminished and it was difficult to remarket the units. The developers further alleged that the appellees were not damaged by the failurе to receive a property report. Finally, the developers alleged that many appellees invested in the units for speculation and failed to close only because of the downturn in the real estate market. Some appellees decided not to close soon after signing contracts for purchase but failed to inform the develоpers until notified of the scheduled closing date.
The elements of estoppel are (1) a representation as to a material fact that is contrary to a later-asserted position; (2) reliance on that representation; and (3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon. See, e.g., State Department of Revenue v. Anderson, 403 So. 2d 397, 400 (Fla. 1981). The developers here seek to rely on contracts which fail to inform appellees of their right to rescind under the Act as required by
The appellees filed suit before the exрiration of the statute of limitations. Laches may be applied before the statute of limitations expires only where strong equities appear. Smith v. Branch, 391 So. 2d 797 (Fla. 2d DCA 1980). Laches is based upon an unreasonable delay, Bethea v. Langford, 45 So. 2d 496 (Fla. 1949), in asserting a known right which causes undue prejudice to the party against whom the claim is asserted. Van Meter v. Kelsey, 91 So. 2d 327 (Fla. 1956). The developers failed to allege that the appellees unreasonably delayed filing suit once they gained knowledge of their right to rescind under the Act. Cf. Law v. Royal Palm Beach Colony, Inc., 578 F.2d 98 (5th Cir.1978) (plaintiffs entitled to summary judgment where developer failed to allege or prove prejudice necessary to invoke laches doctrine.)
Finally, we hold that the trial court did not abuse its discretion in failing to apply the doctrine of clean hands. See Roberts v. Roberts, 84 So. 2d 717 (Fla. 1956).
We feel constrained to note that Florida has enacted a сomprehensive and detailed condominium act aimed at full disclosure which serves to protect unwary purchasers from abusive practices of condominium developers. See
Appellees’ points on cross-appeal are without merit.
RYDER, C.J., and GRIMES, J., concur.