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CANCELLATION OF PURCHASE AGREEMENT
-- MATERIAL ALTERATION
| [1] |
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT January Term 2009 |
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No. 4D08-2175 |
| [3] |
2009 |
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April 15, 2009 |
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RICHARD M. MASTALER, APPELLANT,
v.
HOLLYWOOD OCEAN GROUP, L.L.C., APPELLEE. |
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Appeal from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Barry E. Goldstein, Judge; L.T. Case No.
07-05998 CACE11. |
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Roger G. Stanway, Hollywood, for appellant. |
| [8] |
Margaret Z. Villella and David B. Mankuta of
Atkinson, Diner, Stone, Mankuta & Ploucha, P.A., Fort Lauderdale, for
appellee. |
| [9] |
The opinion of the court was delivered by: Hazouri,
J. |
| [10] |
Richard M. Mastaler (Buyer) and Hollywood Ocean
Group, LLC (Developer), entered into a contract for the construction and
purchase by Mastaler of Villa IV at the Villas of Positano, a condominium,
from the Developer. The original project consisted of the construction of
sixty-two residential units and one commercial unit. The purchase
agreement contains a provision which tracks section 718.503, Florida
Statutes (2008), which provides that a buyer may cancel the agreement of
purchase within fifteen days if the developer makes a material amendment
that adversely affects the buyer. |
| [11] |
In February 2007, shortly before the completion of
the project, the Developer notified Mastaler that nine cabanas were being
added to the pool area, whose use would be exclusive to those who bought
them for $225,000.00. Pursuant to section 718.503 and the Purchase
Agreement, the Developer provided notice to Mastaler of the addition, but
took the position that the changes were not material or adverse. Mastaler
notified the Developer that he chose to exercise his option to cancel the
Agreement. The Developer refused to accept the cancellation and return
Mastaler's deposit. |
| [12] |
Thereafter, Mastaler filed a declaratory action
seeking relief from the Purchase Agreement. After a non-jury trial, the
trial court entered a final judgment in favor of the Developer. In the
final judgment, the trial court held that Mastaler defaulted under the
Purchase Agreement, stating that the addition of the cabanas was not a
material change in the Purchase Agreement that was adverse to Mastaler. In
accordance with the Agreement's terms, it awarded the Developer the cash
deposit held in escrow in the sum of approximately $300,000.00 plus
accrued interest, as well as attorney's fees and costs. We reverse. |
| [13] |
This issue involves a matter of statutory
interpretation, namely whether the trial court correctly interpreted and
applied section 718.503(1)(a)(1), Florida Statutes (2008). As such, the de
novo standard of review is applied. Am. Honda Motor Co. v. Cerasani, 955
So. 2d 543, 545 (Fla. 2007). The trial court's "findings of fact from
disputed evidence" are upheld if supported by "competent,
substantial evidence." Acoustic Innovations, Inc. v. Schafer, 976 So.
2d 1139, 1143 (Fla. 4th DCA 2008). |
| [14] |
As included in the Purchase Agreement, section
718.503(1)(a)(1) provides that an "AGREEMENT IS [] VOIDABLE BY BUYER
BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15
DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH
MATERIALLY ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO
THE BUYER." A change to a purchase agreement is material if a
"reasonable buyer under the purchase agreement [would] find the
change to be so significant that it would alter the buyer's decision to
enter into the contract." D & T Props., Inc. v. Marina Grande
Assocs., LLC, 985 So. 2d 43, 49 (Fla. 4th DCA 2008). "'Adverse' is
defined as '[c]ontrary to one's interests or welfare; unfavorable.'"
BB Landmark, Inc. v. Haber, 619 So. 2d 448, 449 (Fla. 3d DCA 1993)
(quoting The American Heritage Dictionary 806 (New College ed. 1981)). |
| [15] |
In this case, the amendment to the Purchase
Agreement, i.e., the addition of nine cabanas by the pool, is adverse to
Mastaler. This is because it is contrary or unfavorable to Mastaler's
interest, as it hinders his use of the common area around the pool in his
condo complex. The addition of nine cabanas is also material because a
reasonable buyer would find the change significant to their decision to
enter into the contract. This is because the addition of the cabanas
alters the aesthetic nature of the condo complex, taking up a large
portion of the common area space around the pool. It is also material
because the change affects the use of the condo's pool area, requiring an
individual to pay $225,000.00 for the use of a cabana. |
| [16] |
We reverse the trial court's decision, as Mastaler
provided timely notice of cancellation to the Developer after it had
materially and adversely amended the Purchase Agreement, and we direct the
trial court to enter a judgment in favor of Mastaler. |
| [17] |
Mastaler has raised several other points on appeal
which we choose not to address since we are reversing and remanding for an
entry of judgment in his favor. |
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Reversed and Remanded with Directions. |
| [19] |
WARNER,J., and SHAHOOD, GEORGE A., Senior Judge,
concur. |
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