Court Opinion

ID: 9911564
Source: CourtListenerOpinion
Date Created: 2023-12-20 15:03:15.039062+00
Date Added: 2024-06-11T12:50:53.611207
License: Public Domain

DISTRICT COURT OF APPEAL OF FLORIDA
                        SECOND DISTRICT

                           BRIDGETTE SHAW,

                                Appellant,

                                    v.

                             ZARA NEWHAM,

                                 Appellee.

                             No. 2D22-3300

                           December 20, 2023

Appeal from the County Court for Pinellas County; Lorraine M. Kelly,
Judge.

Jeremy D. Bailie and Kyle D. Bass of Weber, Crabb & Wein, P.A., St.
Petersburg, for Appellant.

Alexander T. Lewis of Lewis & Castagliola, P.A., St. Petersburg, for
Appellee.

KELLY, Judge.
     Bridgette Shaw (the buyer) appeals from the county court's order
finding that she breached a contract to purchase the assets of a hair
salon from Zara Newham (the seller) and awarding the seller the entire
contract price as damages. We reverse on the issue of damages.
     The seller owned a hair salon in a leased space. The buyer
contracted with the seller to purchase the "business assets" of the hair
salon, which included the salon's name, telephone number, website,
email address, advertising materials, all customer accounts and records,
documents related to suppliers and vendors, and the furniture, fixtures,
and equipment referenced in "Schedule A."1 The contract terms required
the seller to maintain the business until closing on or before July 1,
2020, and then to assign the lease to the buyer. The seller also agreed to
remain on the premises for two weeks after closing to help the business
transition. The buyer paid a $3,000 deposit that was to be applied
toward the $10,000 purchase price.2 The contract allowed the buyer
twenty days to conduct her due diligence beginning on June 2, 2020.
During that twenty-day period, the buyer could cancel the contract and
have her deposit returned if the business was "not to the Buyer's sole,
complete and personal satisfaction." The closing was originally set for
June 30, 2020, but it was postponed twice to accommodate the buyer's
move from out of state. It was ultimately scheduled for July 15, 2020.
Because the closing was delayed, the parties decided that the buyer
should take over the lease obligation at the end of June. The seller
terminated her lease, and the buyer obtained a new lease directly from
the landlord, commencing July 1. At trial, the buyer claimed it was the
seller's idea to execute this plan because the seller did not want to pay
rent for the month of July. In contrast, the seller claimed that it was a
mutual decision among the parties and the landlord.

     1 Although the contract states that Schedule A was attached to the

contract, such attachment does not appear in the record.
     2 The contract provides that the total purchase price was $18,000,

$8,000 of which was the broker's fee.

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      Four days before the closing date, and outside the due diligence
period, the buyer gave notice that she was not going through with the
purchase. She claimed that the seller refused to give her any of the
business's financial information for her due diligence investigation and
had threatened not to give up her client list or the business's phone
number after the sale. The seller left the premises approximately two
weeks after being informed of the canceled sale and took all the fixtures
and furniture with her, leaving the space completely bare. Consequently,
the buyer filed suit against the seller for, inter alia, unlawful detainer of
the premises and conversion. The seller counterclaimed, seeking
damages for the buyer's breach of contract for failing to close on the
contract.
      Following a bench trial, the county court rendered judgment in
favor of the seller on all claims. The court rejected the buyer's claim for
unlawful detainer, finding that the contract required the seller to
maintain the business until closing and permitted her to stay on the
premises for two weeks afterward to aid in the transition. On the buyer's
conversion count, the court found that the buyer was not entitled to the
fixtures because she did not purchase the salon. As to the seller's
counterclaim for breach of contract, the court found that the buyer
breached the contract when "she did not show up for the closing and pay
for the salon." The court determined that the seller was entitled to the
entire contract price to put her in the position she would have been in
had the buyer not breached. On this point, the court stated, "I think
what shapes the Court's view on these things is that as counsel for [the
seller] accurately argued, [the buyer] basically enjoys the benefit of the
deal that they had without ever having to pay a single penny." The court
rendered judgment in favor of the seller for $10,000.

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     The buyer argues that the county court erred in awarding the seller
more than the amount pled or permitted by the terms of the contract.
She points to the provisions in the contract that state, as follows:

     11.1 DEFAULT BY BUYER:

            11.1.1 If Buyer fails to pay the balance of any cash
                   necessary to close this transaction, or if the
                   Buyer fails to perform any of the covenants and
                   conditions of this Contract, the Seller shall have
                   the right to enforce this Contract pursuant to
                   the Contract terms.
            11.1.2 In the alternative, and at the option of the
                   Seller, the Seller may retain all sums paid by
                   Buyer as liquidated damages.
     The buyer contends that the plain language of the contract
provides the seller only two options in the event of the buyer's breach: (1)
sue for specific performance or (2) collect as liquidated damages the
buyer's $3,000 deposit. Instead, the court awarded to the seller the
entire purchase price and allowed the seller to keep the salon's trade
name, phone number, client list, business records, and fixtures. The
buyer contends that this was error because the contract did not give the
seller the option of obtaining a money judgment in the event of the
buyer's breach.
     The seller argues that because the contract allows for the election
of liquidated damages or money damages, it is unenforceable under
Lefemine v. Baron, 573 So. 2d 326, 327-28 (Fla. 1991). In Lefemine, the
supreme court held that the default provision in a contract was not
enforceable as a liquidated damages clause as a matter of law if there
was an option to sue for damages or to retain a deposit. 573 So. 2d at
330. The supreme court explained that the ability of the seller to refuse
to be limited to the deposit paid by the buyer as a liquidated amount,

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and to sue for damages, destroyed the character of the agreement on
damages and became a penalty. Id. at 328-29.
     In this case, the seller's argument is flawed because, unlike the
contract in Lefemine, the contract at issue does not provide for a remedy
to the seller to sue for actual damages. Rather, the seller is only
contractually permitted to sue for specific performance or to retain the
buyer's deposit. See Mineo v. Lakeside Vill. of Davie, LLC, 983 So. 2d 20,
22 (Fla. 4th DCA 2008) (holding that a default clause that allows the
nondefaulting party to retain the deposit as liquidated damages or sue
for specific performance is enforceable because the damages have been
agreed upon in advance; the seller can seek specific performance at a
purchase price that is certain or accept the buyer's deposit as stipulated
damages).
     The seller also contends that she was entitled to the full contract
price because the buyer received the benefit of the bargain by obtaining
the lease, despite reneging on the sale. As the buyer points out, the
seller's own trial testimony undermines her claim. In response to
questioning about the whereabouts of the assets described in the
contract, the seller admitted, "I have everything in my possession." In
fact, the only item that the seller relinquished was the lease—which she
willingly terminated prior to the closing date.
     We agree with the buyer's contention that the court erred in
awarding the seller a money judgment for the full contract price. See
Waters v. Key Colony E., Inc., 345 So. 2d 367, 367 (Fla. 3d DCA 1977) ("A
party to a contract, who agrees to accept a sum as liquidated damages,
cannot sue for actual damages."). The contract provides that the seller
either could seek specific performance and require the buyer to pay
$10,000 for the salon's assets or she could retain the buyer's deposit as

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liquidated damages and keep the business's assets. By receiving the full
contract price in the final judgment, the seller received a windfall; she
continues to own the salon's trade name and other assets, and she
received $10,000 in damages—in spite of the fact that she put herself in
an unfortunate position by relinquishing the lease before selling her
business. See, e.g., Koplowitz v. Girard, 658 So. 2d 1183, 1184 (Fla. 4th
DCA 1995) ("A party can neither receive more than it bargained for nor
should it be put in a better position than it would have been in had the
contract been properly performed."). In contrast, the buyer received an
empty space and a judgment requiring her to pay the full contract price,
a result that was not authorized by the contract.
     Accordingly, we affirm the county court's rejection of the buyer's
claims against the seller without comment. We also affirm the court's
ruling on the seller's counterclaim that the buyer breached the contract
by canceling the contract outside the due diligence period. However,
because the court's judgment awards damages in excess of what the
contract allows, we reverse the award of $10,000 to the seller and
remand for entry of a judgment in the amount of $3,000.
     Affirmed in part, reversed in part, and remanded with directions.

ROTHSTEIN-YOUAKIM and ATKINSON, JJ., Concur.

Opinion subject to revision prior to official publication.

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