Court Opinion

ID: 180931
Source: CourtListenerOpinion
Date Created: 2010-12-13 17:01:16+00
Date Added: 2024-06-11T17:25:53.449786
License: Public Domain

[DO NOT PUBLISH]

                        IN THE UNITED STATES COURT OF APPEALS

                               FOR THE ELEVENTH CIRCUIT
                                                                          FILED
                                ________________________
                                                                 U.S. COURT OF APPEALS
                                                                   ELEVENTH CIRCUIT
                                       No. 10-11375                 DECEMBER 13, 2010
                                   Non-Argument Calendar                JOHN LEY
                                 ________________________                CLERK

                              D.C. Docket No. 0:08-cv-60791-JIC

RAUL SANTIDRIAN,
PAULA SANTIDRIAN,

lllllllllllllllllllll                                             Plaintiffs - Appellants,

                                            versus

LANDMARK CUSTOM RANCHES, INC.,
a Florida Corporation,
JOE CAPRIO,
Individually,

lllllllllllllllllllll                                            Defendants - Appellees,

RICK BELL,
Individually,
a.k.a. Richard Bell,

lllllllllllllllllllll                                                        Defendant.
                                ________________________

                          Appeal from the United States District Court
                              for the Southern District of Florida
                                ________________________
                                     (December 13, 2010)
Before MARCUS, MARTIN and FAY, Circuit Judges.

PER CURIAM:

      Raul and Paula Santidrian appeal the grant of summary judgment in favor of

Joe Caprio, an agent in a home buying deal between the Santidrians and the

developer of a housing subdivision. The Santidrians alleged, inter alia, that

Caprio was liable for civil penalties stemming from the developer’s failure to

comply with certain reporting requirements under the Interstate Land Sales Full

Disclosure Act, 15 U.S.C. §§ 1701–1720, (“ILSFDA”). The district court granted

summary judgment in favor of Caprio after concluding that the statute did not

reach Caprio’s conduct. We agree and affirm.

                                          I.

      The Santidrians contracted with Landmark Custom Ranches, Inc. (“the

developer”), for the sale and purchase of a single family home in Broward County,

Florida. Caprio served as the listing agent for the property in question. In this

capacity, Caprio “showed the property and acted as a go-between for other

defendants,” but did not negotiate the final contract. Relations ultimately soured

between the parties, and the Santidrians brought this suit to recover their initial

down payment.

                                           2
      As relevant to this appeal, the Santidrians seek to hold Caprio responsible

for the developer’s alleged failure to comply with certain reporting requirements

of the ILSFDA. The district court granted summary judgment for Caprio. The

court recognized that the plain terms of the ILSFDA apply to both “developers”

and “agents,” and also that policy reasons supported holding Caprio liable, but

nonetheless granted judgment for Caprio, because

      the Plaintiffs [did] not come forward with any case law holding real
      estate agents liable under [ILSFDA] where the principal was known at
      the time of contract, where there was no evidence of any violation of §
      1703(a)(2), where the agent did not have authority to set the price, and
      where there was no evidence that the agent had personal responsibility
      for compliance with the registration and reporting requirements of the
      [ILSFDA].

In the absence of any controlling authority, the court relied upon traditional

agency principles, which it held prohibited holding an agent liable who had no

“personal involvement in a violation of the [ILSFDA].” The Santidrians appeal

this outcome.

                                         II.

      We review a district court’s grant of summary judgment de novo, “applying

the same legal standards that bound the District Court, and viewing all facts and

reasonable inferences in the light most favorable to the nonmoving party.” Cruz v.

Publix Super Markets, Inc., 428 F.3d 1379, 1382 (11th Cir. 2005) (quotation

                                          3
marks omitted). Summary judgment is appropriate “if the pleadings, the discovery

and disclosure materials on file, and any affidavits show that there is no genuine

issue as to any material fact and that the movant party is entitled to a judgment as a

matter of law.” Fed. R. Civ. P. 56(c); Drago v. Jenne, 453 F.3d 1301, 1305 (11th

Cir. 2006). We review the district court’s construction and application of the law

de novo. Holton v. Thomasville School Dist., 490 F.3d 1257, 1261 (11th Cir.

2007) (citation omitted).

      The Santidrians argue that Caprio is liable under the ILSFDA’s “plain and

unambiguous language.” Specifically, they contend that Caprio is an agent as

defined by the Act, and further that the Act imposes strict liability upon agents for

their principal’s reporting failures. This argument fails, however, because even

assuming that Caprio is an agent as defined by the ILSFDA, his conduct did not

violate the Act.

      The ILSFDA “is a consumer protection statute ‘that was intended to curb

abuses accompanying interstate land sales.’” Stein v. Paradigm Mirasol, LLC, 586

F.3d 849, 853 (11th Cir. 2009) (quoting Winter v. Hollinsworth Props., Inc., 777

F.2d 1444, 1448 (11th Cir. 1985)). “The underlying purpose of [the ILSFDA] is

that prior to the purchase the buyer must be informed of facts which would enable

a reasonably prudent individual to make an informed decision about purchasing

                                          4
the . . . property.” Paquin v. Four Seasons of Tennessee, Inc., 519 F.2d 1105,

1109 (5th Cir. 1979).1 To this end, the Act requires that a party selling regulated

property must prepare property reports and other disclosures prior to conducting a

final transaction. See, e.g., 15 U.S.C. §§ 1703(a), 1707.

       Violators of these requirements face civil penalties under section 1709.

This provision states, in relevant part:

       (a) Violations; relief recoverable

       A purchaser or lessee may bring an action at law or in equity against a
       developer or agent if the sale or lease was made in violation of section
       1703(a) of this title. In a suit authorized by this subsection, the court
       may order damages, specific performance, or such other relief as the
       court deems fair, just, and equitable. In determining such relief the court
       may take into account, but not be limited to, the following factors: the
       contract price of the lot or leasehold; the amount the purchaser or lessee
       actually paid; the cost of any improvements to the lot; the fair market
       value of the lot or leasehold at the time relief is determined; and the fair
       market value of the lot or leasehold at the time such lot was purchased
       or leased.

       (b) Enforcement of rights by purchaser or lessee

       A purchaser or lessee may bring an action at law or in equity against the
       seller or lessor (or successor thereof) to enforce any right under
       subsection (b), (c), (d), or (e) of section 1703 of this title.

15 U.S.C. § 1709.

       1
         In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc), we adopted as
binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981.

                                               5
      The Santidrians contend that because section 1709 applies to both

“developer[s] or agent[s],” the statute by its plain terms authorizes them to hold

Caprio liable for the developer’s malfeasance. In support of this construction, they

also point to amendments made by Congress years after the statute was first

enacted. Specifically, before 1979, the ILSFDA imposed liability on “[a]ny

developer or agent, who sells or leases a lot in a subdivision . . . ” See Paquin, 519

F.2d at 1109 (discussing 15 U.S.C. 1709(b) (1974)) (emphasis added). The

Paquin court concluded that under this language, an agent could not be held liable

where she lacked authority to execute a sale. Id. at 1111. In 1979, however,

Congress removed the clause “who sells or leases,” which the Santidrians submit

indicates Congressional intent to expand the ILSFDA’s scope and hold agents

liable agents even if they do not actually effect a sale. As the district court

recognized, the Santidrians thus interpret the statute to impose strict liability upon

an agent for the principal’s failure to comply with section 1703's reporting

requirements.

      We do not agree that the ILSFDA imposes this sort of strict liability for

failure to meet the reporting requirements. The Santidrians’s argument fails

because, even after the 1979 amendments, the statute still distinguishes between

agents who effect a sale, as opposed to those involved in the transaction in other

                                           6
ways. Specifically, section 1703(a)(1) imposes disclosure requirements upon

“any developer or agent” who, “with respect to the sale or lease of any lot not

exempt under section 1702,” fails to provide certain reports and records regarding

the property. 15 U.S.C. § 1701(a)(1). Section 1703(a)(2), by contrast, prohibits

certain fraudulent practices and applies to “any developer or agent . . . with respect

to the sale or lease, or offer to sell or lease, any lot not exempt under section

1702(a) of this title . . .” 15 U.S.C. § 1703(a)(2) (emphasis added). Thus, by its

own terms the ILSFDA imposes more extensive liability on agents who engage in

fraud than upon those involved in transactions that fail to comply with the

statute’s reporting requirements.2

       Determining the proper scope of the statute’s liability regime in turn

resolves this appeal. First, it is undisputed that Caprio did not personally violate,

supervise, or otherwise take part in any violations of section 1703(a)(1). Rather,

his role was that of salesperson. He showed the property, marketed it, prepared

and distributed promotional materials, and otherwise took steps to favorably

represent the property, but did not actually sell the property. Caprio thus did not

       2
         Although Congress surely could have enacted a strict liability regime, our conclusion
that they did not do so in the ILSFDA is supported by the fact that such strict liability is foreign
to common law agent liability in analogous circumstances. See Meyer v. Holley, 537 U.S. 280,
285 (2002) (“[W]hen Congress creates a tort action, it legislates against a legal backdrop of
ordinary tort-related . . . liability rules and consequently intends its legislation to incorporate
those rules.”).

                                                  7
violate section 1703(a)(1). Second, we find no evidence that Caprio acted in a

fraudulent or otherwise misleading manner in his role as salesperson. We also

agree with Caprio that the Santidrians have not established materiality or

detrimental reliance regarding any possible misrepresentations by Caprio. See

Kalil v. Blue Heron Beach Resort Developer, LLC, - - - F. Supp. 2d - - -, 2010 WL

2611738, *11 (M.D. Fla. June 28, 2010). Thus, the Santidrians do not allege, nor

does the record support, holding Caprio liable under section 1703(a)(2).

      Having concluded that Caprio is not liable under the ILSFDA, we turn to

whether he may be liable under the common law. Under longstanding principles

of agency law, an agent is not liable for a principal’s malfeasance where the

principal’s identity was disclosed. See Windward Traders, Ltd. v. Fred S. James

& Co. of New York, Inc., 855 F.2d 814, 820 & n.9 (11th Cir. 1988); Chung Yong

Il v. Overseas Navigation Co., 774 F.2d 1043, 1056 (11th Cir. 1985) (“[o]ne who

acts in the capacity of an agent for a disclosed principal is not liable for claims

arising out of a contract executed by the agent on behalf of the principle [sic].”).

Because the principals were disclosed to the Santidrians at all times throughout

this litigation, they thus cannot hold Caprio liable for torts related to the property

transaction that he did not personally commit.

      For these reasons, the judgment of the district court is AFFIRMED.

                                           8