FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T DECEMBER 8, 2010 J OHN L EY CL ERK [DO NOT PUBLISH]
IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 0 9- 14 72 5

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNos . 08 -0 07 90 -CV-ORL-3 5- GJK, 08 -0 12 63 -CV-ORL-3 5- GJK
CARLOS RODRI GUEZ, MIGUEL RODRIGUEZ, ISABEL ANGEL, Plai nt iff s- Co un te r- Defen da nt s- App el le es , ve rs us BA EOLA, L LC, Defen da nt -Co un te r- Cla im an t-Ap pe ll an t.

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt fo r th e Mi dd le Dis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Dece m be r 8, 2 01 0) Befo re EDMONDSON, HILL andALARCON, * Cir cu itJu dg es .

__ __ __ __ __ __ __ __ __ _ * Honora ble Arthur L . Alarc on, United States Circuit J udg e for the Ninth Circuit, sitt ing by desig nation.HILL, Circ ui t J ud ge :

The is su e in th is ap pe al is whet he r or no t a c on do m in iu m

pu rch as e ag reem en t b et ween th e b uyers, Ca rlo s R od rig ue z, Mi qu el Ro dr ig ue z, an d Is ab el Ang el (Bu y ers ), an d the sel le r, BA Eol a, LLC (Dev el op er), i s ex em ptfro m th e requi rem en ts of t he Int ers ta te LandSal es Fu ll Dis cl os ur e Act(ILSFDA), 1 5 U.S.C. § 1 70 1 et

seq . The d is tri ctco urt fo un d t ha t i t was no t. Itgra nt edsu m m ary jud gm en t i n fa vo r of

th e Bu y ers , th e return o f th ei r $4 0,8 50 .00 de po si t, p lu s in te res t, re as on ab le att orne y s’ fees , andco st s. Twent y -s ev en da y s af

te r jud gm en t i ss ue d i n t hi s ca se , and , fift eenda y s af te r
no ti ce o f ap pe al was fi le d, a p an el of t hi s co urt d eci de dSt ei n v . Par ad igm Mir as ol , LLC , 58 6 F .3d84 9 (1 1t h C ir. 2 00 9) , cer t. d en ie d , — U.S. —, 1 30 S.Ct . 19 03 , 17 6 L.Ed.2 d 3 66 (20 10 ). As t he un di sp ut edfact s o f th is cas e are co nt ro ll edby St ei n , we rev ers e th e jud gm en t o f th e d is tri ctco urt, an d re m an d fo r fu rth er p ro ceed in gs
co ns is te ntwit h t hi s o pi ni on . I. On M ay 1, 2 00 7, t he Buy ers si gn eda co nt ractwit h t he Deve lo pe r to bu y a pr eco ns tru ct io n c on do m in iu m un it(Uni t) a t 1 01 Eol a Co nd om in iu m s i n Orl an do , Fl or id a, fo r $4 08 ,50 0.0 0. Th e Bu y ers pu t d own a 10 % de po si t, $ 40 ,85 0.0 0, o n t he Uni t. Par ag rap h 5 (a) o f th e co nt ractsp eci fie d t ha t t he Uni t wo ul d b e b ui ltwit hi n
2two y ears . The co nt ractals o i nc lu de d P arag rap h 2 0, a fo rc e-ma je ur e pr ov is io n, 1 th atall owe d fo r de lay s i n c ert ai n c irc um st an ces . 2 The Uni t was co m

pl et edwell withi n t he two -y ear p eri od . A certi fic at e o f
oc cupa nc y

was i ss ue d, fi le d a ndreco rd edforth e co nd om in iu m de ve lo pm en t o n Mar ch12 , 20 08 . On Feb ru ary 11 , 20 08 , th e Dev el op er n ot ifi edth e Bu y ers th atth e Uni t was sch edul edto be clo se d o n M arch 18 , 20 08 , at 1 :0 0 p .m . Buyers fa il edto ap pe ar atclo si ng . On Ap ril 4, 2 00 8, Dev el op er’s co un se l n ot ifi edBuy ers of t he ir f ai lu re t o at te ndth e sc he du le d c lo si ng , andoff eredto res ch edul e. On Ap ril 23 , 20 08 ,
In pertinent pa

rt, para g raph 5( a) state s: “Notwithstanding a ny thing to the c ontrary 1 here in, [ the Deve loper] shall have the right f rom time to tim e by

notice to [the Buyers] to ex tend the closing. . . , provided howev er, in no ev ent shall the Closi ng occur any later than that dat e which is tw o years from the dateof this Agreement. ” (e mphasis added)
. A force-m ajeure c lause is defined a s “a c ontrac tual provision allocatingthe risk of loss 2 if perf ormanc e bec omes impossibl e or impra cticable , espec ially as a r esult of an e vent or e ffe ct that the par

ties could not have a

nticipated or c ontrolled. Black’ s Law Dictionar

y , 718 (9th ed. 2009). Paragraph 20 of

the Agree ment rea ds in its entirety : 20. For ce ma

jeure . Either par

ty here to shall be excused for the period of a ny delay in the perf

ormanc e of a

ny obligations hereunde r whe n such dela y is occa sioned by

causeor ca

uses bey ond the control of the party whose pe rfor

mance is so delayed and the time for per formanc e shall be a utomatically

extended for a like period. Such cause

s shall include, without limitat ion, all labor disputes, civil commotion, war, warlike operations, invasion, rebellion, hostil ities, milit ary or usurped power, sabotage, gove rnment regulations or controls, fir e or other casualty, inability to obtai n any nec essary mate rials or services, or acts of God. (empha sis added). 3Bu y ers sen t a wri tt ende m an d l et te r to th e Dev el op er t o re sc in d t he co nt ractan d

return the ir d ep os it , cla im in g Dev el op er h adfai le d t o p ro vi de th em wit h apro pe rty rep ort re qu ire d b y

th e ILSFDA. Se e 15 U.S.C. § 1 70 3( c). Whi le ackno wled gi ng th atitha d n otpro vi de d apro pe rty repo rt t o t he Bu y ers , th e Dev el op er cl ai m edth at th e Uni t was ex em

ptfro m ILSFDA requi rem en ts . Se e Sect io n 1 70 2( a)(2 ). It 3 refu se d t o re sc in d t he co nt ract , dec la redth e Bu y ers inde fau lt , andex erci se d i ts rig htto ret ai n t he de po si t u nd er the co nt ract . On M ay 1, 2 00 8, Bu y ers fil eda co m pl ai ntindi st ric t co urt al le gi ng th atth e Dev el op er h advi ol at edth e ILSFDA, Fl or id a st at e la w, andbre ach edth e co nt ract . The y so ug htto reco ve r th e d ep os it , ot he r da m ag es , att orne y s’ fees , pre jud ge m en t in te res t, an d c os ts . The m at eri al fact s wer e u nd is pu te d. Bo th th e Bu y ers an d t he Deve lo pe r fil edcro ss -m ot io ns forsu m m ary jud gm en t. The di st ric t co urt, ad op ti ng th e rep ort
an d re co m

m en da ti on of t he m ag is tra te jud ge , grant edsu m m ary jud gm en t i n fa vo r of th e Bu y ers , andag ai ns t the Deve lo pe r, fo r th e $ 40 ,85 0.0 0 d ep os itam ou nt , pl us in te res t, re as on ab le att orne y s’ fees an d c os ts . The d is tri ctco urt h el d t ha t
Section 1702(a) (2) r eads in pe rtinent part: “E x emptions. Sale . . . of lots ge nera lly
. 3 Unless the method of disposition is adopted for the pur pose of e vasion of this chapte r, the provisions of this chapter sha ll not apply to . . . the sale . . . of a

ny improved land on whic h there is a reside ntial . . . building, or the sa le . . . of land unde r a c ontrac t obligatingthe seller . . . to ere ct such a

building ther eon within a period of two year s.” 4pa rag rap h 2 0 o f th e co nt ract , th e fo rc e-ma je ur e cl au se , fat al ly und erm in edth e Dev el op er’s o bl ig at io n t o c om pl et e co ns tru ct io n o f th e Uni t wi th in two y ears , ren de rin g t he co nt ractil lu so ry . The Dev el op er ap pe al s. 4 II. The qu es ti on is whet he r orno t t he di stric t co urt erredingra nt in g s umm ary jud gm en t t o t he Bu y ers , andde nyin g t he Deve lo pe r’s cro ss -m ot io n fo r su m m ary jud gm en t, o n the ba si s t ha t t he fo rc e-ma je ur e cl au se ren de redth e two -y ear
co m m it m en t fo r cl os in g i ll us ory . In s o d oi ng , th e d is tri ctco urt h el d t ha t t he
co nt ractwas n otex em

ptun de r Sec ti on 17 02 (a)( 2) of the ILSFDA. Sho rtl y aft er
The district cour

t stated: 4 The only way to rea d [P ara g raph 5( a) a nd Paragraph 20] in conce rt is to acce pt that Paragraph 5( a) se t the date f or closingat two year s from contra ct, and Paragraph 20 pe rmitted [t he De veloper ] t o exceed that oblig ation under the contra ct for the rea sons provided under the par agraph. I

n fac t, by its plain meaning , it is di fficult to discer n a re ason for

delay that would not be excused under Par agraph 20. Conseque ntly , the Mag istrate Judge w as cor rec t that the expanse of Para g raph 20 r ender ed the two- y ear commitment for closingillusory
. Compare Harve

y v. LakeBuena Vista Resort, LLC , 568 F. Supp.2d 1354, 1359 (M.D. F la. 2008), aff’d , 306 F. App’ x 471 (11th Cir. 2009), (sic) (findingan obligation ill usory

when it conditioned per formanc e on “a ny g round cognizable in contra ct law a s impossi bility or fr ustration of per formanc e, including , without limit ation, wind, rain, lightning a nd storm”), with K

amel v. Ke nco/The Oaks at Boca Raton LP , 321 F. App’ x 807, 810 (11th Cir. 2008) (findingthe one- y ear and eleve nth month commit ment was not re ndere d illusory when it conditioned perf ormanc e on “de lay s cause (sic) by Buyer or acts of G od, the unava ilability of materia ls, strikes, other labor pr oblems, g overnme ntal order s, or other e vents which would support a de fense based upon impossibilit y of per formanc e for rea sons beyond the Seller’s c ontrol.”). Kamel , an unpublished ca se cited by the district court, is in acc ord with Stein
.

5jud gm en t i ss ue d i n thi s ca se , th is co urt i ss ue d St ei n . St ei n , 58 6 F .3dat 8 49
.

The fact s o f St ei n are ee ril y si m il ar t o t hi s ap pe al . As he re, t he
co nd om in iu m

pu rch as ers in St ei n m ad e a d own pa ym en t wi th th e d ev el op er. The
co nt ractsp eci fie d t ha t t he co nd om in iu m wou ldbe bu il t wi th intwo y ears . Id . at 85 2. As he re, t he co nt ractin cl ud eda si m il arl y -wo rd ed fo rc e-ma je ur e pro vi si on th atall owe d fo r de lay s u nd er ce rta in cir cu m st an ces . Id . As he re, i f th e St ei n de ve lo pe r br each edth e co nt ract , th e St ei ns co ul d g etba ckth ei r de po si t, wi th in te res t an d a ny actu al da m ag es . Id . After t he ho us in g b ub bl e in Flo rid a b ur st , th e St ei ns ha d s eco ndth ou gh ts an d wan te d o utof t he ir c on tra ct . As he re, t he y ga ve writ te n n ot ic e to th e d ev el op er tha t t he y were t erm in at in g t he ir c on tra ct , as t he de ve lo pe r ha d fa il edto pro vi de th em wit h apro pe rty repo rt u nd er t he ILSFDA. Id . As he re, t he de ve lo pe r refu se d t o re tu rnth e St ei ns ’s dep os it , con te nd in g t ha t th e co nt ractbe twee n t he pa rti es fitth e ex em pt io n s etou t i n ILS FDA for“ th e sa le
orlea se of a ny im

pr ov edlan d o n wh ic h t he re i s a r es id en ti al , comm erci al , co nd om in iu m , or i ndus tri al bu il di ng , or t he sal e o r le as e o f la ndun de r a co nt ract ob li ga ti ng th e se ll er o r le ss or to erec t s uc h abu il di ng th ereo n wi th ina pe rio d o f two y ears .” Id. cit in g 15 U.S.C. § 1 70 2( a)(2 ). As h ere, t he St ei n de ve lo pe r co m pl et edco ns tru ct io n o f th e co nd om in iu m wit hi n t wo years, as itha d c on tra ct edto do so , andpro vi de d t he Ste in s wi th a 6no ti ce o f is su an ce o f th e Certi fic at e o f Occupa nc y . Id

. at 8 52 -5 3. As he re, t he

St ei ns fil edsu itin di st ric t co urt al le gi ng vi ol at io ns of t he ILSFDA an d s ta te law. Id . at 8 52 -5 3. As he re, t he pa rti es fil edcro ss -m ot io ns forsu m m ary jud gm en t an d th e d is tri ctco urt g ran te d s umm ary jud gm en t i n fa vo r of th e b uyers, al lo win g t he St ei ns to term in at e th e co nt ractan d re qu iri ng th e d ev el op er t o re tu rnth e d ep os it
. Id . at 8 53 . As he re, t he di st ric t co urt h el d t ha t the fo rc e-ma je ur e claus e fat al ly
un de rm in edth e d ev el op er’s o bl ig at io n t o c om pl et e co ns tru ct io n wi th in two y ears , as th e sc op e o f th atclaus e ex te nd edbe y on d e ve nt s t he law wo ul d re co gn iz e as
es tabl is hi ng im

po ss ib il it y

of p erfo rm an ce. Id . As he re, t he St ei n di st ric t co urt he ldth atth e d ev el op er co ul d n otcla im th e two -y ear c om

pl et io n e xe m

pt io n u nd er th e ILSFDA b ecau se th e co nt ractren de redth e d ev el op er’s o bl ig at io n t o c on st ru ct th e co nd om in iu m

“ il lu so ry .” Id

. Ina th ou gh tfu l, wel l-r eas on edop in io n, t he St ei n pa ne l o f th is co urt re ve rs ed
an d re m an de d the jud gm en t o f th e d is tri ctco urt, fi nd in g t ha t “ [e]ven th ou gh th e
co nt ractex cu se s d el ay s b ey on d t he [Dev el op er’s] con tro l, i t i s s ti ll on e ‘obl ig at in g’ [th e Dev el op er] to co m pl et e co ns tru ct io n o f th e co nd om in iu m withi n two y ears forpu rp os es of § 17 02 (a)( 2) of t he [ILSFDA].” Id . at 8 58
. The s am e is 5

The Stein panel take s a dim view of c laims broug ht under the I L SFDA, de scribingit as 5 “a f eder al statute that has be come a n incre asing ly

popular mea

ns of cha nnelingbuy er’ s remorse into a leg al def

ense to a beac h of contra ct claim.” Stein , 586 F.3d at 852.

7tru e h ere. 6 III.

Ourpu rp os e is no t t o re in ve ntth e whe el . W e co nc lu de th at St ei n is
co nt ro ll in g p rece de ntin th is cas e. On t ha t b as is we rev ers e th e jud gm en t o f th e di st ric t co urt an d re m an d fo r fu rth er p ro ceed in gs co ns is te ntwith t hi s o pi ni on . REVERSED AND REMANDED.

On pag e 20, note 6, of

the B uy er’ s brief, a

n attempt is made to distinguish Stein on the 6 basis that it was wrong ly

decide d, that it “essentially evisce rate [s] I L SFDA a

nd cre ate[s] a hug e loophole for a

ny develope r who wishes to dispense with I L SFDA’ s disclosure re quirements.” We find this argument to be without merit. 8