Opinion ID: 453591
Heading Depth: 1
Heading Rank: 3

Heading: Liability of Hakim

Text: 11 Tavormina next urges that the debtors are entitled to retain Hakim's $25,000.00 deposit pursuant to the liquidated damages clause in the stipulation. The stipulation, however, provides [t]hat the parties agree that the effectiveness of this agreement so far as the trustee is concerned is contingent upon approval of the bankruptcy court. Record, vol. 1 at 15-16. Both the bankruptcy court and the district court relied on this provision in holding that the lack of court approval of the stipulation rendered its liquidated damages clause unenforceable. 12 Tavormina first seems to argue that court approval is not required to enforce a liquidated damages clause, relying on In re Sombrero Reef Club, Inc., 15 B.R. 177 (Bankr.S.D.Fla.1981). However, not only is this position contrary to the plain language of the stipulation, but Sombrero Reef is inapposite because that decision was based on a court-approved contract. 13 The stipulation also stated that the parties hereto agree to remain bound under the letter and spirit of the agreement until said approval can be obtained. Record, vol. 1 at 16. Tavormina urges that this language created a separate enforceable option contract by which she agreed to forego default proceedings on the original sales contract pending court approval of the modification agreement. According to Tavormina, the liquidated damages clause is applicable by reason of the independent option agreement. 14 The bankruptcy court, however, construed the provisions in the stipulation to be subject to this Court's approval. Record, vol. 1 at 135. Interpretations of contracts by a trier of fact are reviewable under the clearly erroneous standard. See, e.g., Medtronic, Inc. v. Janss, 729 F.2d 1395, 1399-1400 (11th Cir.1984). In view of the contradiction in the stipulation between the phrases the effectiveness of the agreement ... is contingent upon approval and the parties ... remain bound under the ... agreement until ... approval can be obtained, as well as our examination of the record as a whole, we cannot say that the bankruptcy court's construction of the stipulation was clearly erroneous. 4 15 Finally, Tavormina contends that Hakim is estopped from asserting the invalidity of the stipulation because he ratified the agreement by tendering his deposit, attempting to lease the property and allegedly suing for damages under the stipulation. Under Florida law, when a party has alternative, inconsistent remedies, his choice of one remedy precludes further pursuit of the second. For example, a party suing for breach of contract must select the remedy of either damages or rescission. E.g., Hustad v. Edwin K. Williams & Co.--East, 321 So.2d 601 (4th DCA Fla.1975), cert. denied, 333 So.2d 41 (Fla.1976). The purpose of this election rule is to prevent double recoveries for the same wrong. See U.S. v. Weiss Pollution Control Corp., 532 F.2d 1009, 1012 (5th Cir.1976). 16 In this case, Hakim, by tendering his partial deposit of $25,000.00 and relying on anticipated court approval by arranging for future leasing of the property, acted consistently with the conditional nature of the stipulation; his conduct does not give rise to an estoppel. Moreover, we do not read his counterclaims as asserting positions inconsistent with his stance that the stipulation is void. Count one seeks only the return of his $25,000.00 deposit and count two requests a declaration that the stipulation is void. Count three is based on Weitzner's alleged misrepresentations and primarily seeks the return of the deposit. Although the counterclaim also asks for lost profits, this request is apparently based on the supposed breach of the original sales contract rather than the stipulation. Nowhere does he appear to take the position that the stipulation is a valid, enforceable contract. We conclude that the bankruptcy court correctly determined that Tavormina was not entitled to retain Hakim's $25,000.00 deposit. 17 The judgment of the district court is AFFIRMED in part and REVERSED in part.