Bernhard Law Firm obtained a $160,000 payout for its Brazilian client after a Chinese buyer walked out of a condo purchase the day before closing. Bernhard Law Firm used a reverse specific performance claim, under its theory that burden of title required performance by purchase. The client’s ultimate payout was 8X the purchase deposit and covered all carrying costs, attorney’s fees, plus an additional $100K payment on top of the escrow release. (Florida Bar disclaimer: results may not be typical. You may not have as beneficial a result). If you have a real estate purchase problem, dispute, or question, please contact Bernhard Law Firm at 786-871-3349, firstname.lastname@example.org, www.bernhardlawfirm.com.
As garnered from the public filings, Bernhard Law Firm sued on behalf of its Brazil client to require a Chinese buyer to specifically perform their contract to purchase a Miami condo on Bayshore Drive. The Chinese buyer repudiated this purchase the day before closing with no explanation, and refused to answer requests to close or mediate. The Chinese buyer had an attorney representing her throughout the transaction. In litigation, Bernhard Law Firm got the Chinese buyer to admit that she did not exercise any contractual cancellation, that she had the financial ability to pay, that the contract required her to purchase the condo and entitled the Brazilian seller to performance.
In court, Bernhard Law Firm argued that its Brazilian seller had not been able to extricate itself from title to the property so as to return to Brazil, its directors’ home country, and thus there was no adequate remedy at law. Accordingly, the Court should have required the Chinese buyer to perform by transferring the contract price to escrow and taking title. Mirzataheri v. FM East Developers, LLC, 193 So. 3d 19, 22 (Fla. 3d DCA 2016) (specific performance is proper remedy for breach of home purchase contract); Clements v. Leonard, 70 So. 2d 840, 842 (Fla. 1954) (specific performance remedy is mutual in realty contracts; that seller seeks to enforce payment of money and acceptance of title makes no difference). For more details on the arguments and Florida law, keep reading below:
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- Specific performance generally
Under Florida law, the purpose of specific performance is “to compel a party to do what it agreed to do pursuant to a contract.” Free v. Free, 936 So. 2d 699, 704 (Fla. 5th DCA 2006). The decision whether to decree specific performance of a real estate contract is a matter that lies within the sound judicial discretion of the Court, and it will not be disturbed on appeal unless it is clearly erroneous. Mondy v. Sanchez, 972 So. 2d 1032, 1033 (Fla. 3d DCA 2008) (aff’ing specific performance judgment on real estate purchase contract, on holding that party’s affidavits were sufficient evidence despite their gain if the transaction closed). However, public policy favors enforcement of contracts, and it is the function of the Court to give effect to and enforce the contract as it is written. See Sanislo v. Give Kids the World, Inc., 157 So. 3d 256, 260 (Fla. 2015) (holding that because of policy that favors the enforcement of contracts, as a general proposition, unambiguous contracts are enforceable unless they contravene public policy); U.S. Fire Inc. Co. v. Morejon, 338 So. 223, 225 (Fla. 3d DCA 1976) (“it is the function of the court to give effect to and enforce the contract as it is written.”); see also Kurchner v. State Farm Fire and Cas. Co., 858 So. 2d 1220, 1221 (Fla. 3d DCA 2003) (“the rules of construction mandate that the [contract] as written be given its full force and effect.”).
- When a court should order specific performance
Generally, a court should order specific performance if the contract is definite and legally binding, its enforcement is practical and equitable, and the court believes that justice requires it. L’Engle v. Overstreet, 55 So. 381 n.1 (Fla. 1911); Invego Auto Parts, Inc. v. Rodriguez, 34 So. 3d 103, 104 (Fla. 3d DCA 2010) (reversing denial of specific performance of a real estate sale contract when plaintiff made this showing); Castigliano v. O’Connor, 911 So. 2d 145, 148 (Fla. 3d DCA 2005); Pariz v. Colon, 77 So. 3d 721, 721 (Fla. 3d DCA 2011) (holding a court in equity can award specific performance to order transfer of title to property).
- Presumption of inadequate remedy in real estate
Inadequate remedy at law is presumed and the plaintiff need not show it to enforce real property agreements. See, e.g., Jack Eckerd Corp. v. 17070 Collins Avenue Shopping Ctr., Ltd., 563 So. 2d 103, 105 (Fla. 3d DCA 1990) (holding plaintiff need not show irreparable harm to enforce real property contractual covenants); Sterling Crest, Ltd. v. Blue Rock Partners Realty Group, LLC, 164 So. 3d 1273, 1278 (Fla. 5th DCA 2015) (presuming irreparable harm to enforce contracts for sale of real property); Planned Parenthood of Greater Orlando v. MMB Properties, 171 So. 3d 125, 131 (Fla. 5th DCA 2015) (holding irreparable harm not required to enforce contracts relating to real property); Autozone Stores, Inc. v. Northeast Plaza Venture, LLC, 934 So. 2d 670, 673 (Fla. 2d DCA 2006) (holding tenant would not have to show irreparable harm to enforce lease); Henry v. Ecker, 415 So. 2d 137, 140 (Fla. 5th DCA 1982) (presuming irreparable harm to enforce contracts for sale of real property).
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- A seller’s right to specific performance
Florida appellate courts have long recognized a seller’s right to enforce a real estate sale contract through specific performance, and regularly uphold specific performance judgments in favor of sellers, requiring buyers to perform their obligations to perform the purchase, transfer purchase funds, and take title to real property. See, e.g., Ge Lin v. Ecclestone Signature Homes of Palm Beach, LLC, 59 So. 3d 267, 271 (Fla. 4th DCA 2011) (aff’ing judgment in favor of seller, granting specific performance on finding that buyer had breached real estate sale contract, and holding that the seller was entitled to enforce the contract by a judgment of specific performance); Pakalski v. CFC Pasadena Golf, LLC, 42 So. 3d 869, 870–71 (Fla. 2d DCA 2010) (reversing dismissal of seller’s specific performance action against buyer, as seller’s retention of buyer’s deposit did not forego the seller’s right to enforce the contract by suing for specific performance); Sandpiper Dev. and Const., Inc. v. Rosemary Beach Land Co., 907 So. 2d 684, 687 (Fla. 1st DCA 2005) (aff’ing summary judgment of specific performance in favor of seller against buyer, requiring buyer to perform purchase and accept title); Bilow v. Benoit, 519 So. 2d 1114, 1117–18 (Fla. 1st DCA 1988) (reversing denial of seller’s specific performance claim on contract for sale of real property, as seller’s use of deposit monies was insufficient to support finding that she elected to accept deposit as liquidated damages and forego right to seek specific performance); Williams v. Noel, 105 So. 2d 901, 904 (Fla. 3d DCA 1958) (aff’ing judgment of specific performance in favor of sellers, requiring buyers to purchase the property); Clements v. Leonard, 70 So. 2d 840, 842 (Fla. 1954) (holding remedy of specific performance on realty sale contract is mutual; where sought by the seller, the fact that relief sought is only to enforce payment of specific sum of money makes no difference); Booth v. Bobbitt, 94 Fla. 704, 708 (Fla. 1927) (holding in seller’s action for specific performance on real estate purchase contract, the tender of the deed may be conditioned on payment of purchase price by the buyer).
- Application shown through this case
In this case, the Brazilian seller had an enforceable written contract with the Chinese buyer for purchase and sale of real property with specific performance remedies upon default. Bernhard Law Firm got the Chinese buyer to admit that the contract required her to purchase the property and entitled the Brazilian seller to seek specific enforcement upon her default. The Chinese buyer admitted she did not exercise the contractual right to cancel her purchase. Bernhard Law Firm got the Chinese buyer to stipulate that she had the financial means to perform and that she was not raising financial defenses in any way. The Chinese buyer was well represented by a competent attorney who catered to clientele from China, and thus she could not reasonably claim to have been pushed into the transaction.
The Brazilian seller tendered its end of the bargain; the Chinese buyer simply refused to show at the closing and refused to answer requests to close or mediate as contractually required. The Chinese buyer did this even though she had decided not to close beforehand, letting the seller fly from Brazil to Miami, move out of the property, and lose other opportunities to sell. The Chinese buyer failed to allege any underlying facts that excused her performance and had no tenable justification for non-performance. The Brazilian seller and its directors had to return to Brazil but could not extricate themselves from title and the responsibilities therewith because the seller had unreasonably walked out of their agreement. The Brazilian seller’s inability to sell the property and return to Brazil renders money damages alone insufficient—the seller had to be relieved of title to the property.
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Given the Chinese buyer’s behavior, timing, and lack of defenses, Bernhard Law Firm positioned the Court to require performance. The Court could not reward the Chinese seller’s unreasonable refusal to keep her word and perform as agreed. Further, the Chinese buyer’s unreasonable acts excused the seller’s tender of title until the buyer transferred the purchase price into escrow. See Regents Park Investments, LLC v. Bankers Lending Servs., Inc., 197 So. 3d 617, 621 (Fla. 3d DCA 2016) (holding plaintiff makes a required showing for specific performance under these elements and can be excused from ultimate tender until the opposing party performs).
Under these circumstances, Florida law, equity, justice, and public policy required that the Chinese buyer perform the contract as written and agreed, transfer the purchase price to escrow, close the sale, and take title and responsibility for the Property. For more details on the case, see Bichir Holdings v. Guo, 16-10837 CA, Miami-Dade Circuit Civil. If you have a real estate purchase problem, dispute, or question, please contact Bernhard Law Firm at 786-871-3349, email@example.com, www.bernhardlawfirm.com.