### IN THE UNITED STATE S C OURT OF AP P EALS F ORT HE F IF T H CIRCUI T

N os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

DO U GLAS L. NI CK ELL; GAYLE F. NI CK ELL, P l a i n ti ffs - A p p ell a n ts

v. B E A U V IE W O F B IL O X I, L .L .C ., D efen da n t- A pp el l ee RO BER T G. PATRI CK ; FRAN CES P. PATRI CK ; BI G CO N FEDE RATE D O G S , L .L .C ., P l ai n t i f fs - A pp el l an t s

v. B E A U V IE W O F B IL O X I, L .L .C ., D efen da n t- A pp el l ee T IM O T H YE . D U R S T ; D AV ID J . W AA G B O , P l ai n t i f fs - A pp el l an t s

v . B E A U V IE W O F B IL O X I, L .L .C ., D efen da n t- A pp el l ee A N D R E W C U M M IN G , U nit e d S ta te s C ou rt o f Ap pe a ls Fifth C irc uit 

## F I L E D M arch 2 8, 20 11 Lyl e W . Cayce C lerkN os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

2 P l a i n ti ff

- A p p ell a n t

v. B E A U V IE W O F B IL O X I, L .L .C ., D efen da n t- A pp el l ee

A pp eal s f

rom t h e U n i t ed S t ates D i st ri ctC ou rt f o rt he So ut he r n Di s t r i c to f M i s s i s s i ppi

B ef ore K IN G , D AV IS, an d S O U T H W IC K , C i rcui tJu dg es. L E S L IE H

. SO U T H W IC K , C i rcui tJu dg e: Pl ai nt i f fs w e r e pur c has e r s o f c o n d o min iu m u n it sa tap l anne d d e ve l o pm e nt
o n t he M i s s i s s i ppiG ul f Coa s t
. Theys e e k t o r e s c i nd t he i rs al e s c o nt r ac t s o n t he basi s of vi ol ati on s of

t h e I n t erst ate La n d S al es Fu l lD i scl osure A ct
. Th e di st ri ct
c o ur tg r ant e d s um m ar y j udg m e nt i n fav o r o f t he de fe nda nt Beau Vi e w , ho l di ng t hata s t at ut o r y e xe m pt i o n a ppl i e d. W e R E V E R S E a n d R E M A N D

.

FA CT S AND PR OCEDURAL HI S TORY B eau Vi ew of

B i l oxi , L. L. C

. i s a c ondom i ni um dev e lo p e r . I n 2004, B eau V i ew pu rchased a pl otof l an d i n B i l oxi , M i ss is s i pp ion the coastof t h e G u l f

of M exi co. I teng aged i n a n ati on alm arketi n g cam pa i gn f or a pl an n ed f

ou r- t ow er, 4 5 6 -u n it c o n d o m in iu m d e v e lo p m e n t. Beau V i e w t o o k r e s e r v a t i o n s f o ru n i t s i n t h e f

o r m o f n o n - b i n di ng ag r e e m e nt s t hata l l o w e d p o te nt i alpur c has e r s t o c anc e lt he i rr e s e r va t i o n a nd obtain a ref

u n d of t h ei r deposi tat an y t i m e. A f t er prospect ive pu rchasers
r e s e r ve d ne ar l y al lo f t he 1 12 uni t s i n To w e rI , B e a u V i e w b e ga n t ak i ng reser v ati on s f

or un i t s i n T ow er I I, t h ou gh potenti alpu rchasers w ere advi sed T ow er II m i gh t no t be co n stru cted i f th ere w a s i n su ff i ci en t i n teres t.N os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

3 A f t er H u rri can e K atr i n a h i t t h e G u l f C oast i n A u gu st200 5, t h e m arket f or c o ndo m i ni um uni t s t he r e de c l i ne d s har ply. Beau Vi e w w o ul d e nt e ri nt o b i ndi ng sa l es c ont r ac t s f

oronl y 87 of t he uni t s i n Tow erI

. Const r uct i on o f Tow erI w as com pl et ed i n N ovem ber 200 7. A ccor di n g t o B eau V i ew , m an y pu rchasers backed
ou t of the i r ag ree m en ts be fore cl osin g, an dsales on on l y 6 2 u n i ts h a ve cl ose d to da t e , w i t h t he r e m ai ni ng 50 uni t s i n To w e rI uns o l d. P l ai n t i f fs are f ou r s epa rat e parti es of condom i n i u m pu rchasers. E ach of t he f o ur pa r t i e s s i gne d a“ Condo m i ni um Sa l e a nd Pur c has e Agr e e m e nt” i n J une or Jul y of 2005 f

or a uni ti n T ow erI

. H urr i c ane K at r i na st r uck o n A ugust29, 200 5. P l ai n t i f

fs c l osed on t h ei r r espect ive u n i t s i n N ovem ber an d D ecem ber 20 07 , a f t e rBea u Vi e w c o m pl e t e d c o ns t r uc t i o n. On J u n e 2 7 , 2 0 0 8 , P l a i n t i f fs , t h r o u g h s e p a r a t e l e t t e r s t o B e a u V i e w, dem anded r es c i ss i on o f t hei rs al es c ont r ac t s. They al l ege d t hatB eau Vi ew had fai l ed to provi de t h em w i t h di scl osures requ i red un der t h e I n t erst ate La n d S al es F u llD isclo su re A ct (“IL S A”). 1 5 U .S .C

. § 1 7 0 1 -1 7 2 0
. T h e sa m e d a y , P la in tiffs f i l e d f o ur s e pa r at e l awsui t s ag ai ns t Beau Vi e w i n t he U

. S. D i s t r i c tCour tf o rt he So ut he r n Di s t r i c to f M i s s i s s i ppis e e ki ng r e s c i s s i o n o f th e i rc o nt r ac t s a nd da m ages. T h e di st ri ctcourtconsol i da t ed the f ou r act i on s, an d the pa rt i es proceeded
w i t h d is c o v ery. I n O ct ober 200 9, cr oss m ot i on s f or s u m m ary j u dg m en tw ere f i l e d

. P l a i n t i f

fs a s k e d t h e d i s t r i c tc o u r t t o f i n dt h a tBe a u Vi e w v i o l a t e dI LS A,
w i th da m a ge s to be d e t erm i n ed at tri a l

. B ea u V i ew arg u ed i t did n ot viol a te I L S A b e c a u s e th e lo t s s o ld to P la in t if fs w e r e e x e m p tfr o m th e s t a t u t e ’s
r e gi s t r at i o n a nd d i s c l o s ur e r e qui r e m e nt s . I n t he a l t e r nat ive , Bea u Vi e w s o ugh t p a r tia l s u m m a r yju d g m e n t o n P la in tiffs ’cla im s fo rr es c i ss ion, ar g u in gth e cla im s
w ere barred by t h e t w o- year st atute of l i m i t ati on s. T h e d i s t r i c t c o u r t e n t e r e d s u mm a r y j u d g me n t i n fa v o r o f B eau Vi e w, d is m is s e dP la in t if

fs ’ c la im s in a llfo u rc a s e s , a n dd is m is s e da s m o o tB e a u V ie w ’sN os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

4 m ot i on f

or pa rt i alsum m ary j u dg m en t
. Th e di st ri ctcourtf ou n d that Plai n t i f

fs’ uni t s w er e e xem ptf

r om t he di sc l os ure r equi r em ent s of I L S A, a n dt her ef

or e Beau V i ew cou l d n ot be l i a b l e for fa i l i n g to p rov i d e th e req u i red pr op ertyrep ort. Pl ai nt i f fs a ppe al e d s e pa r at e l y, a nd t he f o ur c as e s w e r e c o ns o l i da t e d f o rb r i e f i ng a n d ora larg u m en t. DI S CUS S I ON

“We r e v i e w a g r a n to f s u mma r yj u d g me n td e n o v o , a p p l y i n gt h e s a me stan d a rd as th e d i stri ct cou rt. ” Add i c k s Se r v s . , I nc . v . GG P–Br i dge la nd, LP , 596 F

. 3d 286 , 293 ( 5th C i r. 201 0)

. Su m m ary j u dg m en ti s proper onl y w h ere “t h ere i s n o g en u i n e d i sp u te as to a n y m a t erial fa ct an dthe m ov a n t i s en ti tl ed to j udg m e nta s a m at t e ro f l aw. ” Fe d. R. Ci v. P. 5 6( a)

. A di s put e i s g e nui ne i f t he
s umma r y j u d g me n t “ e v i d e n c e i s s u c h t h a t a r e a s o n a b l e j u r y c o u l d r e t ur n a
v e r d ic t fo rth e ” n o n -m o v a n t. A n d ers on v. L i berty L obby, I n c. , 477 U

. S. 242, 248 (1 9 8 6 ). A s Jud ge C l ark of

t h i s c ou rtw rot e 30 yea rs ago, I L S A w a s en act ed as a
m easu re “ t o i n sure t h at a buy er, pri or t o pu rchasi n g cert ai n ki n ds of realest ate, i s i nf o r m e d o f

fac t s w hi c h wi l le nab l e hi m t o m ak e an i nf o r m e d de c i s i o n a bo ut p u rch a singthe pr op erty
. ” L aw v. R oyal Palm B each Colony, I n c. , 578 F. 2d 98, 99 (5t h C i r. 1 9 7 8 ). T o accom pl i sh thi s pu rpose, I L S Arequi res al ldevel opers o f fe r i ng l o t s f

o r s al e i n i nt e r s t at e c o m m e r c e t o s ubm i ta n e xt e ns ive “ s t at e m e nt of r ec or d” t o t he Sec r et ar y o f t he U .S

. D e p a r t m entof H ous i ng and U rban D evel opm en t( “ H U D ” )

. 15 U

. S

. C

. §§ 1703 ( a) ( 1) (A) , 170 6. D evel opers m u stal so pr o vi de a l lpo t e nt i alpur c has e r s w i t h a“ pr i nt e d p r o p e r t y r e po r t” pr i o rt o t he p u r c h a s e r ’ s s ig n in go f a n yco n tr a c t o ra g r e e m e n t t o p u r c h a s e . I d. § 1 7 0 3 (a)( 1 )( B ). R eg u l a ti on s w ere ad op ted tha t i n cl u d ed con d om i n i u m u n i ts
w i t hi n t he de f

i ni t i o n o f

“ l o t s ” und e rI LSA , ade f i ni t i o n we c o nc l ude i s c o ns i s t e nt
w ith th e s ta tu te
. S ee Wi n t er v. Hol l i ngsw ort h Props. , I n c. , 777 F. 2d 1444, 1447- 4 9 (11 th C ir. 1 9 8 5 ).N os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

5 If the se d i sclosu res a re n ot give n , th e statu te p rov i d es th e p u rch a ser w i th
a n e x c lu s iv e o p tio n to re v o k e th e irco n tr a c t. I d. § 1703(c )

. Th i s opt i on m ustbe
e x e r c is e d w ith in tw o y e a r s o f th e d a te o f v io la tio n . I d. It is undi sput ed t hat Beau Vi e w pr o vi de d no ne o f Pl ai nt i f fs w i t h t he r e qui r e d d i s c l o s ur e s pr i o rt o t he
s ig n in go f th e p u r c h a s e a g r e e m e n ts
. C e r ta in s a le s , h o w e v e r , a r e e x e m p t fr o m IL S A ’ s re q u ir e m e n ts
. I d. § 1702. Thi s a ppe alc o nc e r ns t he o pe r at i o n o f t w o o f t he e xe m pt i o ns . O ne e xe m pt i o n, t he 1 0 0 -lot ex em p t i o n , p r o v i d e s t h a tI L S A ’s r e g i s t r a t i o n a n dd i s c l osu re re q u irem en ts do no ta pply t o “ t he s al e . . . o f l o t s i n a subdivi s i o n c o nt ai ni ng fe w e rt han o ne h u n d red l ots w h i ch are n ot ex em p t un d er su b section ( a ) of t h i s section [. ]” I d. § 1 702(b) ( 1)

. N otdi r ec t l y appl i c abl e he r e i s a se c ond exe m pt i on w hi c h m ay be
com bi n ed w i t h t h e 100

- l otex e m pti on . W e w i l ldi scuss how B eau V i ew argu es th eyw ou l d h a ve u ti l i ze d th e tw o tog eth er. IL S A ’ s req u i rem en ts do n ot ap p l y to
a s al e “ o f l and unde r a c o nt r ac t o bl i ga t i ng t he s e l l e r . . . t o e r e c ts uc h a b ui l di ng th ere on w i th i n a p eriod of tw o y ea rs. ” I d. § 1 7 0 2 (a )(2). T h e B eau V ie w d evel opm en tw as t o ha ve m ore t h an 100 un i t s w h en con stru cted , bu t allthe sales a t i ssu e in th i s su i t o ccu rred pr i or to 1 0 0 u n i ts b e in gs o ld

. B e a u V ie w d id n o t e n te rin to a n y s a l e s c o n tr a c ts in w h ic h it ob l i ga ted i tself

to con stru ct t h e con d om i n i u m bu i l d i n g w i th i n tw o y ea rs. It argu es t h at an acceptabl e uti l i zati on of t h e t w o exem pti on s i n t an dem i s t o use t h e f i rstexem pti on un t i lal m ost100 l ot s hav e been sol d, an d thereaf t er t o enter i n t o contr act s c on t ai n i n g a com m i t m en tt o erec ta bu i l di n g w i t h i n t w o years. T h e onl y i ssue w e m u stdeci de i s w h et h er t h e 100

- l otexem pt i on app l i es
u n ti l99 l ots a re so l d of a l a rg er d e v elop m en t, or w h eth er itap p l i es o n l y to de ve l o pm e nt s b e i ng pr o m o t e d a s ha vi ng fe w e rt han 10 0 l o t s w he n c o m pl e t e d. B eau V i ew argu es t h at Pl ai n t i f fs’un i t s a r e exem pt un der ILS Abecau se t he 100- l ot exe m pt i on appl i es as l ong as i t i nt ended t o us e t he Sec t i on 1702( a) ( 2)
exe m pt i on f

or s a le s abov e 9 9 uni t s i n T ow erI

. Beau V i ew m ai nt ai ns i thasN os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

6 a lw a y s p la n n e d to s e ll n o m o r e th a n 9 0 u n its b e fo r e in c lu d in g a n a d d e n d u m in f u t u r e s a l e s c o n t r a c t s g u a r a n t e e i n g t h e p r oj e c t wo u l d b e c o mp l e t e dwi t h i n t wo y e a r s . S u p p o r t i n gB e a u V i e w’ s a r g u me n ta r e Gu i d e l i n e s c r e a t e db yt h e HUD O f f i c e o f I nt er st at e Land Sal es R egi st r at i on. These G ui de li nes pr ovi de t hat “[ d ]eve l op ers o f su b d ivisi on s con tain i n g m ore tha n 99 l ots w h o w i sh to op era te
u n der [ t h e 100

- l ot ] exem pti on m u st assure t h em selves t h at al l l ot s i n excess of 99 have bee n and w i l l be so l d i n t r ansac t i ons ” ut i l i zi ng anot herex em pt i on. 61 F e d

. R e g . 1 3 ,59 6 -0 1 , 1 3 ,60 4 (M a r. 2 7 , 1 9 9 6 ) ( G u id e li n e s P a rt V (a )). T h e H U D G u i del i n es w ere not sub j ectt o noti ce and com m en tprocedu res. S u c h i n t e r n a la genc yg u i d e l i n e s a r e e n t i t l e dt o a d e g r e e o f d e fe r e n c e , we con siderthe m on l y to th e “ex ten t th a t th ose i n terp reta ti on s h a ve the ‘ p ow er to p ersu a d e[. ]’” C h ri st ensen v. Harri s C n ty. , 529 U

. S

. 576 , 587 ( 200 0) (ci t ati on o mi t t e d )

. W h e r e a n “ a g e n c y h a s n o t u s e d a d e l ib e r a t iv e p r o c e s s s u c h as
n o t ic e -a n d -c o m m e n tr u le m a k in g ,” th is c o u r td o e s n o t g r a n tth e a g e n c y ’s i nt e r pre t at i o n C h evron d e fe r e n c e . Free m an v. Q u i cken L oan s, I n c. , 626 F. 3d 799 , 805

- 06 (5t h C i r. 2 0 1 0 ) (ref erri n g t o C h ev ro n , U.S .A

. v . Na tu ra l R es . D ef. Cou n ci l, I

n c. , 4 6 7 U .S . 8 3 7 , 8 4 2 -4 3 (1 9 8 4 )). O f c e nt r al i m po r t anc e t o da y i s t hatw e do no te xa m i ne s o ur c e s o f m e ani ng
e x te r n a l to th e s ta tu te w h e n th e s ta tu to r y la n g u a g e is c le a r . Id

. a t 80 5
. W i th t h e rel evan t provi si on s of ILS A , w e need not l ook bey on d the st atutor y l an gu age. The 10 0- l o te xe m pt i o n pr o vi de s a n e xe m pt i o n f o r“ t he s al e . . . o f

l o t s i n a sub di vi si on contai n i n g few er t h an one h u n dred l ot s w h i ch are n ot exem pt un der
su b section (a) of t h i s section [. ]” I d. § 1 7 0 2 (b )(1 ). Im p o r ta n tly , a“s u b d iv is io n ” is d efi n ed as “a n y lan d w h i ch i s . . . divide dor i s p rop ose dto be divide di n to l ots

. . . f or t h e p u r p o s e of sale .

. . as p a rt of a co m m on pr om oti on a lplan [. ]” I d. § 1 701 ( 3)

. The s t at ut e de f i ne s “ c o m m o n pr o m o t i o nalpl an” a s “ a pl an,
u n d erta k en bya sin gle d ev elop er or a gr ou p of d ev elop ers a cti n g i n con cert, toN os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

7 o ff er lots f or sa l e or lea se[. ]” I d. § 17 0 1 (4). W e rea dthis l a n gu a ge toge th er to provi de f

or an exem pti on w h ere, at t h e tim e of sa le , t he s o l d l o t s a r e pa r to f l and

“ di vi ded or i s proposed to be di vi ded i n t o” few er t h an 100 l ot s not exem pt un der Sec t i on 1702( a) “ f

ort he purpo se of sa l e . . . as par t of

. . . ” “ a pl an und er t aken by
a . . . de ve l op er.” I

d. §§ 1 7 0 2 (b )(1), 17 0 1 (3 ), 1 7 0 1 (4 ). F or exam pl e, i f

at t h e t i m e of

sal e of a l oti n a subd ivi si on , t h e subd ivi si on as described t o t h e pu rchaser i s t o contai n 100 or m ore l ot s t h at are n otyet
exe m ptunder Sec t i on 1702( a) , t he dev el ope rm ay nott ake advant age of t he 100- l o te xe m pt i o n. On t he o t he rha nd, i f a tt he t i m e o f

s al e o f a l o t i n as ubd ivi s i o n, t he s ubd ivi s i o n pr o po s e s t o c o nt ai n few e r th an 10 0 l o t s t hata r e no te xe m pt unde rSe c t i o n 1 70 2( a) , t he 1 00

- l o te xe m pt i o n m ayb e ut i l i z e d. The pa r t i e s do no t di s put e t hata tt he t i m e o f s al e o f Pl ai nt i f

fs ’uni t s , t he Bea u V iew c o ndo m i ni um de ve l o pm e nt , a s pr o po s e d a nd m ar ke t e d a c r o s s t he
c o unt r y, c o nt ai ne d m o r e t han 10 0 uni t s . I ti s i r r e l e va n t w h e t he rt he d e v e lo p m e n t in c lu d e d fo u rto w e r s a n d4 5 6 u n its o ro n ly1 1 2 u n its in a s in g le t o we r–u n d e re i t h e rf i n d i n g , Be a u Vi e w wo u l dn o tq u a l i f yf o rt h e 100

- l ot
e x e m p tio n . W e f i nd i ts i gnif

i c antt hatt he t e xto f Se c t i o n 17 02 (b) ( 1) pr o vi de s t hatt he 100

- l ot exem pti on ap pl i es t o sub di vi si on s “ c o nt ai ni ng few er t h an one h u n dred l o t s w hi c h aren ot ex em p t un d er su b section ( a )[

. ]” I d. § 1 7 0 2 (b )(1 ) (e m p h a s is added)

. Congre ss ’ s use of t he pr es ent t ens e s ugges t s t hatt he l ot s c l ai m ed t o b e exem pt un der sub sect i on ( a) m u stal readybe exem pt att h e t i m e t h e devel oper s e e ks t o i nvo ke t he 1 00

- l o te xe m pt i o n. W e a l so look to t h e intern a ll og i c of I L S A

. In S ection 17 0 3 (a)( 2 ), l ots
can n otbe exem pt un der S ect i on 170 2( a) ( 2) un l ess t h e devel ope r is un der a contractobl i gati n g i tt o erec ta bu i l di n g w i t h i n t w o years. Acontr actca n n ot obl i gate a devel oper t o com pl et e a bu i l di n g w i t h i n t w o years un l ess t h e contr act
e x ists

. Asim p le in te n t to en te r in to a b in d in g co n tra ct is n o t e n o u g h to s a tisfyN os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

Today’ s deci s ion i s comp atible with this court’ searlierdeci s ion in Law . See Law , 57 8 1 F.2 dat 10 0. In that c ase, we hel dth at f orp urp os esof

determining comp lianc e with ILSA, th e f ocu si so nth e timeof t h e p urch as er’ sexe cutionof a contract of

p urch as e. Id. Like t oda y’s holdin g, if

th e requireddi s closuresare notprovi dedatth at time , ILSA h asbe enviolate d

. Id. 8 t he e xe m pt i o n b e c aus e i nt e ntdo e s no to bli ga t e t he de v e l o pe rt o c o m pl e t e t he bu i l di n g w i t h i n t w o years. T h e G u i del i n es even st ate t h at i f t h e bu i l di n g i s not
c o m p le te , “th e co n tr a c t m u s t o b lig a te th e s e lle rto co m p le te th e b u ild in gw ith in tw o y e a r s [,]” a n d th a t “[i] f th e c o n tr a c tu a l o b lig a tio n is n o t p r e s e n t, th e s a le is
n ot exem pt. ” 61 F ed. R eg. 13, 596

- 01, 13, 598

- 99 (M ar. 27, 199 6) ( G u i del i n es Pa rt I V (b) )

. Th er ef

or e, a l ot c annot be exe m pt und er Sec t i on 1703( a) ( 2) w i t houtan exi st i n g contract u alobl i gati on , even un der t h e G u i del i n es. 1 O u r i n t erpret ati on i s c on si st en tw i t h t h e reasoni n g of a rec en tdeci si on fr o m th e S e c o n d C ir c u it. Se eBo da ns ky v . Fif t h o n Pa r k Co nd o , LLC , N o. 10- 270- C V , 201 1 W L 8 9 1 0 2 8 ( 2 d Ci r . M a r . 1 5 , 2 0 1 1 )

. A d e v e l o p e r wa s h e l d t o have vi o l at e d I LSAw he n i tfai l e d t o pr o vi de t he r e qui r e d di s c l o s ur e s be f o r e s i gni ng
c o n tr a c ts fo r c o n d o m in iu m s w ith th e p la in tiffs . I d. a t* 1. Af

t e ra nal yz i ng t he l e gi s l at ive hi s t o r y andt he “ unam bi guo us ” t e xto f I LSA , t he c o ur tc o nc l u d e d, “I L S A ’ s 1 0 0 -lo t e x e m p tio n is d e te r m in e da s o f th e tim e o f ‘ th e s a le

. . . ’o f th e lo t.” Id

. a t *7 (qu o tin g1 5 U .S .C

. § 1 7 0 2 (b )(1)). T h e c o u r t e x p la in e d th a t I L S Ad o e s n o t s u g g e s t “ p u r c h a s e r s m u s t w a it
som e un kn ow n l en gth of t i m e – perh ap s years – u n t i lt h ey l earn w h et h er t h e l ot th eypu rch a sed w a s ex em p t .
. . . ” I d. at *8. F or on e, t h e t w o-y e a r r e v ocat i on
r i ghtf r om t he dat e o f

s i gni ng w oul d be of l i t t l e val ue i f purc hase r s m i ghthave “to w a i t an i n d efi n i te l en gth of ti m e to l ea rn w h et h e r t h e y c ou l drev ok e.” I d. S econd , I L S Aprovi des a three- year st atute of li m i t ati on s af

t er t h e date of
s ig n in gfo r c la im s re la te d to p u r c h a s in ga lo t w ith o u t p r o p e rd is c lo s u r e s . I d. Thi s i s i n c o nt r as tt o t he t hr e e - ye ar s t at ut e o f l i m i t at i o ns “ ‘ af t e rdi s c o ve r y o f

t he
v io la tio n o ra fte rd is c o v e r ys h o u ld h a v e b e e n m a d e b yth e e x e r c is e o f r e a s o n a b leN os . 10- 60204, 10- 60205, 10- 60206, 10- 60207

9 d ilig e n c e ’fo rcla im s ” u n r e la te d to IL S A ’ s d is c lo s u r e re q u ir e m e n ts
. I d. ( quo t i ng 1 5 U .S .C

. § 1 7 1 1 (a )(2)). T h e Secon d C i rcui tal so c on t rast ed IL S A ’ s 12- m on t h exem pti on , w h i ch
e xe m pt s a pur c has e d l o t“ i f 1 2 o rf e w e rl o t s i n t he s ubd ivi s i o n ‘ ar e s o l d .

. . ’ i n a s pe c i f i e d [ 12 ]

- m o nt h pe r i o d, a nd n o tm o r e t han 1 2 lot s w e r e ‘ s o l d .

. . ’i n a p rev i ou s [ 1 2 ]- m on th pe ri od

. ” I d. a t* 9 ( quo t i ng 15 U

. S .C

. § 1 70 2(b) ( 2) )

. The court reasoned t h at t h ou gh “ t h e [ 12]- l otexem pti on exem pts a pu rchased .

. . l ot ba s e d o n s al e s . . . o f o t he r l o t s i n t he s ubd ivi s i o n, Cong r e s s s t r i c t l y l i m i t e d t he
sc ope of t he o t herr el evant sa l es t o a [ 12]

- m ont h per i od .

. . [ , ] w el lw i t hi n t he 2- ye a r rev oca ti on pe ri od u n d er S ection 17 0 3 (c)

. ” I d. The 10 0- l o t e xe m pt i o n, o n t he
o th e rh a n d , “c o n ta in s n e ith e rth is e x p lic it lim ita tio n , n o rd o e s it e x p lic itly d ep en d on f

u tu re sa l es . . . of oth er lots i n the su b d ivisi on . ” I d. T h e cou rt con cl u d ed byl oo k i n g to th e fed era lD i cti on a ryA ct’ s m a n d a te to consi der st atutor y w ords used i n t h e present t en se as i n cl u di n g t h e f u t u re,

“‘ u n lesst h e c on t exti n d i cat es ot h erw i se . ’” Id

. a t * 1 0 (qu o tin g1 U .S .C

. § 1 ). In corp ora ti n g “th e futu re ten se into the 10 0 -l ot ex em p ti on . . . ru n s con traryto IL S A ’ s rev oca ti on an d statu te of l i m i tati on s p rov i sion s. ” I d. The r e as o ni ng i n B odanskyi s c o ns i s t e ntw i t h o uro w n. F or t h ese reasons, P l ai n t i f fs’ cond om i n i u m u n i t s at B eau V i ew w ere not
en t i t l ed to an I L S Aexem pti on . B eau V i ew vi ol ated I L S Abecau se itdi d n ot provi de the requ i red di scl osures. R E V E R S E D an d R E M A N D E D f or f u rt h er proc eedi n gs.