Cape Cave Corp. v. Skinner

42 Fla. Supp. 12
CourtCircuit Court of the 20th Judicial Circuit of Florida, Charlotte County
DecidedJuly 19, 1974
DocketNo. 72-474
StatusPublished

This text of 42 Fla. Supp. 12 (Cape Cave Corp. v. Skinner) is published on Counsel Stack Legal Research, covering Circuit Court of the 20th Judicial Circuit of Florida, Charlotte County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cape Cave Corp. v. Skinner, 42 Fla. Supp. 12 (Fla. Super. Ct. 1974).

Opinion

CHARLES T. CARLTON, Circuit Judge.

This cause came on before me for final hearing based upon the pleadings in the case, the pre-trial stipulation, argument of counsel and memoranda of law submitted by counsel.

Findings of fact

This litigation commenced with the filing of a complaint in which Cape Cave Corporation sought to foreclose a purchase money mortgage which had been executed by Truman A. Skinner, as trustee, and his wife, at the time of purchase.

Mr. Skinner answered the complaint and affirmatively alleged that Cape Cave was not entitled to a judgment of foreclosure because of its prior breach of the terms and conditions of the note, mortgage and sale contract and because of a failure of consideration.

In addition, Mr. Skinner also filed a counterclaim in which he sought specific performance of a partial release clause which was contained in the mortgage note and sales contract. It was alleged that under this particular release clause Cape Cave was to have conveyed certain acreage encumbered by the mortgage to Mr. Skinner based upon the cash downpayment which was paid to Cape Cave at closing. The cash payment totálled $145,500. Cape Cave never gave the releases to Mr. Skinner.

[14]*14The case came on for final hearing on September 18, 1973, at which time it was argued orally by counsel based upon facts and documents contained in a comprehensive pre-trial stipulation which was submitted to the court at that time. At the conclusion of the argument the court requested memoranda from the parties summarizing their respective positions, which were received and have been considered by the court.

The pre-trial stipulation1, which includes both statements of fact and documents, provides the facts upon which this case is to be decided.

The relationship between the parties, Cape Cave and Skinner, was originally based upon an agreement of sale and purchase (hereinafter “agreement”) of certain real property consisting of nine lots (number 1 through 9). The purchaser’s rights under this contract were ultimately assigned from the original purchaser, Burtson Construction Corporation, to Skinner, as trustee. (PT. 3)

The agreement contains two particularly significant clauses, the first of which relates to partial releases. It provides as follows —

“Subject mortgage shall contain a partial release clause which shall permit Purchaser to effect the release of parcels (as presently platted) on the basis of the payment including downpayment of $35,000 per acre.” (Emphasis added.) (Ex. A, page 1)

The second important clause appears on page 2 of the agreement and it provides that if the purchaser fails to commence construction of an apartment building on or before a stated date then, and in that event —

“. . . at the option of the seller, Five (5) of the lots subject hereof shall be reconveyed to Seller by Purchaser, and Purchase Money Mortgage and Note shall be reduced (credited) by Seller on the basis of $25,000 per acre.”

After such a reconveyance the purchaser was to have no further construction obligations.

Beyond the foregoing, the agreement also provided for a total sale price of $582,000, payable $145,500 at closing, with the balance of $436,500 to be represented by a promissory note bearing interest at the rate of 6/2 % per annum, the latter indebtedness to be secured by a purchase money mortgage. (PT. 2)

[15]*15In addition, Cape Cave was obligated, under the agreement, to provide paved roadways, water, electric power, telephone service and sewage facilities on or before December 31, 1971. (PT. 3)

The closing on this transaction occurred in two parts. The “preclosing” was held on May 12, 1970.

The final closing was concluded on May 14,1970, at which time the $145,500 downpayment was made by Mr. Skinner. (PT. 5) The mortgage and note which were prepared in conjunction with the closing basically reflect the terms and conditions of the agreement. The reconveyance language (for the mortgagor’s failure to commence construction) was carried over intact. However, the partial release language which ultimately appeared in the mortgage note omitted explicit reference to the fact that partial releases were to be given based upon the downpayment, and this purported ambiguity seems to have been the basis for Gape Cave’s continual refusal to provide the releases which Skinner periodically demanded. The language which appears in the note is —

“Parcels as platted (Lots 1 through 9) may be released from the lien and effect of this mortgage upon the payment by mortgagor of the sum of Thirty-Five Thousand and no/100 ($35,000.00) Dollars per acre. No partial releases shall be made for fractional lots and the minimum release shall consist of one (1) platted lot.” Ex. D, page 4)

It is obvious that this language does not prohibit the furnishing of releases based upon the downpayment. The parties have stipulated that if Skinner is entitled to a release based upon the down-payment the acreage to be released could not exceed 4.157 acres because partial lots may not be released.2

In addition to the deeds, mortgage note and closing statement (all prepared by the law firm with which Mr. Skinner is associated) there was also a letter agreement which was executed at the closing [16]*16by both parties. It provided that the terms and conditions of the agreement were to “continue in full force and effect” after the closing. (Ex. F) Specifically, it stated —

“It is agreed that the terms and conditions of that certain agreement to sell and purchase, dated the 12th day of March, 1970, between Cape Cave Corporation and Burtson: Construction Corporation, which contract has been assigned to the undersigned as purchaser will continue in full force and effect and its conditions will survive this closing.”

The note provided for equal amortized principal payments of $39,303.33 (including interest) commencing on December 1, 1970, with subsequent mortgage payments to be made each June 1 and December 1 thereafter. The note and mortgage contained a 60-day acceleration provision, and the mortgage provided for reconveyance of five lots if the apartment building construction was not commenced before December 31, 1970. (PT. 4, 5)

The only remaining language of significance in the mortgage note is typewritten in and provides that the mortgagor will not be personally liable on the note —

“The Payee agrees that there shall be no personal responsibility upon the Maker of this Note, the Payee agreeing to look to the land securing this Note as its security for this obligation.” (Ex. D, p. 2)

This language is important because Cape Cave is claiming a right to recover attorney’s fees and costs. Skinner, of course, takes the position that the quoted language prevents such a recovery.

On September 9, 1971, fully one year before Cape Cave declared the mortgagor to be in default, Skinner made the first of a series of written demands for releases based on the downpayment. (Ex. G) Cape Cave replied to the demand through its attorney by referring Skinner to an officer of Cape Cave. (Ex. H)

On November 29,1971, Skinner again wrote to Cape Cave about the releases, this time to Mr. Rogovin, the designated officer.

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Bluebook (online)
42 Fla. Supp. 12, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cape-cave-corp-v-skinner-flacirct20cha-1974.