Florida Appeals Court Allows Claim for Breach of Contract on House Purchase

mansionReal estate contracts can be used in a wide variety of circumstances. It is of utmost importance to retain qualified legal counsel in drafting and litigating these types of contracts. The amount of money in dispute may be significant, and legal technicalities may act as a bar to recovery.

In Dutra v. Kaplan, the Third District Court of Appeal of Florida reviewed a trial court’s decision regarding a contract to purchase residential property. The plaintiff and defendant wished to purchase a house together and entered into a written contract to that effect. The contract included a provision detailing the disposition of the house should the parties no longer wish to live together. The contract provided that the plaintiff’s interest in the property would first be offered to the defendant. If the defendant elected to purchase the plaintiff’s interest in the residence, he was to repay any money the plaintiff had paid toward the purchase of the property. This repayment was to take place in a period of no more than five years.

Unsurprisingly, the parties decided two years later that they no longer wished to live together. The plaintiff moved out of the residence, and the defendant chose to purchase her interest in the house, per the parties’ agreement. However, the parties disagreed over the amount of money to which the plaintiff was entitled. The defendant asserted that he would not pay any money pursuant to the agreement if the plaintiff did not accept the amount he initially offered. Thereafter, he paid nothing to the plaintiff, while continuing to reside in the house.

The plaintiff filed this suit a little over five years after she moved out of the house, alleging a breach of the parties’ contract. In response, the defendant contended that Florida’s five-year breach of contract statute of limitations barred the plaintiff’s suit. According to the defendant, the statute began to run when the parties first separated and he professed his refusal to pay under the contract. The trial court agreed with the defendant and entered summary judgment on the basis that the statute of limitations had expired.

On appeal, the Third District cited to Florida law concerning anticipatory breaches of contract. In the event of an anticipatory breach, a non-breaching party has three options:  to rescind the contract, to bring suit immediately, or to delay filing suit until the time for performance has expired. With the third option, which was chosen in this case, the repudiation of a contractual obligation ripens into a breach upon the deadline for performance.

The appeals court found that the plaintiff had waited for the five-year period provided by the parties’ agreement. When payment did not occur, the plaintiff’s claim for breach of contract accrued. The plaintiff filed this action shortly thereafter. As such, the appellate court held that the trial court erred in dismissing the plaintiff’s complaint.

If you are a party to a real estate contract, it is vital to understand the legal intricacies involved. The Southwest Florida real estate attorneys at Lusk, Drasites, & Tolisano are skilled in the areas of real estate and contract law. From Naples and surrounding Collier County, to Port Charlotte, Lehigh Acres, Cape Coral, and other communities in Lee County, our legal team can help you with your real estate needs. Contact us online or call toll-free at (800) 238-7442 to discuss your real estate and business contracts needs.

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