Court Opinion

ID: 4017415
Source: CourtListenerOpinion
Date Created: 2016-07-20 15:04:00.97328+00
Date Added: 2024-06-11T07:44:56.128400
License: Public Domain

Third District Court of Appeal
                                State of Florida

                             Opinion filed July 20, 2016.
          Not final until disposition of timely filed motion for rehearing.
                                ________________

                                 No. 3D16-529
                          Lower Tribunal No. 15-18141
                              ________________

                     Regents Park Investments, LLC,
                                     Appellant,

                                         vs.

                      Bankers Lending Services, Inc.,
                                     Appellee.

     An appeal from a non-final order from the Circuit Court for Miami-Dade
County, John Schlesinger, Judge.

      Arnaldo Velez, P.A. and Arnaldo Velez, for appellant.

      Garbett, Allen & Roza, P.A. and David S. Garbett and B. Elizabeth Interthal,
for appellee.

Before SUAREZ, C.J., and WELLS and SALTER, JJ.

      SUAREZ, C.J.

      Appellant Regents Park Investments, LLC (“Regents”) appeals an Order

discharging a lis pendens which it recorded on certain parcels of real property in

connection with its suit for specific performance. We reverse.
      Regents was the buyer and Appellee Bankers Lending Services, Inc.

(“Bankers”) was the seller in a contract for five parcels of land in Miami-Dade

County. The sales contract was amended with eight addenda. Addendum Number

2 contained an agreement that any liens and claims would not render the title

unmarketable or preclude closing and that instead the parties could escrow funds

from the proceeds pending release of the liens. Paragraph 7 of Addendum Number

8 provided the option to escrow $50,000 at closing until resolution of the liens.

Paragraph 7 also required the escrow agreement to be acceptable to Old Republic

National Title Insurance Co., Regents’ title insurer. The Old Republic National

Title Insurance Company Commitment required lot clearing liens to be released,

but did not provide for escrow in lieu of the release of those liens.

      It is undisputed that the properties in question were encumbered with lot

clearing liens in favor of the City of Miami. Bankers attempted to obtain release of

the existing lot clearing liens by way of a suit against the lienholders. Bankers

eventually entered into a settlement agreement with the lienholders under which it

paid an agreed amount for release of the liens. The parties to that action also

agreed to a joint stipulation and proposed order for release of the liens. The joint

stipulation and proposed order were submitted to the court for approval and

signature, but, as of the date of the closing, the stipulation had not been approved

and the final order had not been signed by the trial court.

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      In light of the fact that the order was unsigned and the lot clearing liens

were, therefore, still in place, Bankers was willing to have $50,000 of the purchase

price placed into escrow at the closing and communicated that willingness to

Regents. Bankers also attempted to establish a time for the closing of the sale.

However, Old Republic Insurance Company was unwilling to agree to the escrow

arrangement in lieu of release of the liens, so Regents did not proceed with the

closing. After the date for closing lapsed, Bankers sent Regents a notice stating

that it had been ready willing and able to close on the closing date and that

Regents, as buyer, had failed to close.

      Shortly thereafter, Regents filed the present suit for specific performance

and recorded the lis pendens at issue here.       After discovery was undertaken,

Bankers moved to discharge the lis pendens. After hearing on the motion, the trial

court granted the motion for discharge. In its oral ruling the trial court stated that

the correct standard for the trial court to use was “….the one that’s articulated in

the Golden Shores1 case []. Under the circumstances, there’s a colorable case

1 In Golden Shores Properties, LLC. v. Santopietro, 792 So. 2d 644 (Fla. 3d DCA
2001), this Court cited the language of Florida Statute Section 48.23(3) which
states that when an action is not founded on a duly recorded instrument “the court
shall control and discharge the recorded notice of lis pendens as the court would
grant and dissolve injunctions.” Relying on that language this Court stated that
that at a hearing on the motion to dissolve, “the party seeking the injunction [] has
the burden of establishing a prima facie case to support the injunctive relief.”
Golden Shores, 792 So. 2d at 645.
       With respect to the statutory language, the Florida supreme court stated in
Chiusolo v. Kennedy, 614 So. 2d 491 (Fla. 1993):
              [T]he statutory reference to injunctions exists merely to
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certainly, but I don’t think clear and convincing evidence has been presented to the

court sufficient to overcome the motion to discharge or dissolve the lis pendens.”

The trial court then dissolved the lis pendens. Regents argues, and we agree, that

clear and convincing was not the proper standard for the trial court to use.

However, the proper standard of proof is not entirely obvious under existing case

law. Therefore, we must first examine what is the proper standard.

      As stated in Chiusolo v. Kennedy, 614 So. 2d 491 (Fla. 1993), a “lis pendens

cannot be dissolved if, in the evidentiary hearing on request for discharge, the

proponent can establish a fair nexus between the apparent legal or equitable

ownership of the property and the dispute embodied in the lawsuit. . . . The

relevant question is whether alienation of the property or the imposition of

intervening liens, if either actually occurred, conceivably could disserve the

purpose for which lis pendens exists.” Id. at 492.

      The question in this case is how that “fair nexus” can be shown and what

burden of proof the proponent of the lis pendens bears. On this issue the court in

Chiusolo stated only that “the quantum of proof necessary” was not “as severe” as

the substantial likelihood on the merits standard which had been imposed by the

             permit property holders to ask in an appropriate case that
             the plaintiff post a bond where needed to protect the
             former from irreparable harm.

Id. at 493. That language clarifies that the burden of proof is not actually clear and
convincing evidence, as indicated by the trial court.
                                          4
Fifth Circuit in its ruling. Id. at n. 2. In addition, in Acapulco Construction, Inc.

v. Redavo Estates, Inc., 645 So. 2d 182 (Fla. 3d DCA 1994) this Court held that

the burden was not “the greater weight of the evidence.” See also Christian v.

Sanderhoff, 731 So. 2d 804, 805 (Fla. 4th DCA 1999).

      In Nu-Vision, LLC v. Corporate Convenience, Inc., 965 So. 2d 232 (Fla. 5th

DCA 2007) the Court addressed a claim in which a tenant/proponent of a lis

pendens sought review of an order granting discharge where it claimed to have an

option to purchase the real property which was the subject of its lease and of an

eviction action against it. In upholding the discharge order, the Court there stated:

             [E]stablishing a ‘fair nexus’ between a claim in litigation
             and the property’s title requires a little more than simply
             pleading a theoretical nexus.

             To establish a fair nexus requires the showing of a good
             faith, viable claim. In this case, [tenant] cannot make
             that showing because the December 16, 2004 letter
             cannot support an action for specific performance as a
             matter of law.
                                        ***
             [W]ith respect to the specific performance count, we find
             that the complaint fails to state a cause of action, and
             could not therefore support a finding of a ‘fair nexus’ as a
             matter of law.

                                          ***

             In our view, [] Chiusolo simply left unanswered the
             question as to the quantum of proof required of a lis
             pendens proponent to succeed in defending against a
             motion to dissolve the lis pendens. The Court stated only
             that ‘the burden of proof rests on the proponent’ and that
             the ‘quantum of proof is not as severe as’ the substantial
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             likelihood of success on the merits standard necessary to
             maintain a temporary injunction under Florida law. The
             Court would not have needed to place the burden of
             proof on either party if there was nothing to prove –
             which would be the case if any allegation in a pleading
             that states a theoretical connection to the title in real
             property was sufficient to maintain a lis pendens
             throughout the litigation.

             In our view, it would also be contrary to sound public
             policy to allow a lis pendens proponent to tie up real
             property belonging to another person when the proponent
             cannot even make a minimal showing that there is at least
             some basis for the underlying claim. And requiring the
             proponent to show that he or she has a good faith basis to
             allege facts supporting a claim and that the facts alleged
             would at least state a viable claim, if true, is completely
             consistent with Chiusolo. . . .

             For these reasons, we have elected to follow the
             definition of ‘fair nexus’ adopted by the Third and Fourth
             Districts after Chiusolo, which requires the proponent to
             demonstrate a good faith, viable claim.

Id. at 234-236.

      Citing similar language Bankers argues that because the proponent of a lis

pendens must make an evidentiary showing of “a good faith, viable claim” Regents

was required to establish that its claim for specific performance was “viable” --

i.e. that it could establish all the necessary elements of that claim – at the hearing

on the motion for discharge. We think Bankers goes too far because such a

standard would have required Regents to fully prove its underlying claim in a

preliminary “mini trial.”

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      As this Court stated in Invego Auto Parts, Inc. v. Rodriguez, 34 So. 3d 103,

105 (Fla. 3d DCA 2010):

             In order to invoke the remedy of specific performance, . .
             . . the plaintiff must prove that ‘as a condition precedent
             to specific performance it either paid the contract sum;
             tendered it; was ready willing and able to do so; or was
             excused from so doing.’ [internal citations omitted]

In the case below, the parties disagree about whether Regents can satisfy any one

of the four alternative means of proving the condition precedent. Bankers alleges

that Regents cannot prove any of the alternatives and Regents argues that the

evidence will show (once fully developed and once the matter is ripe for trial) that

it was either ready, willing and able to close or that it was excused from doing so.

      As this case demonstrates, it is impracticable to require a proponent of a lis

pendens to fully prove each element of its claim in an evidentiary hearing where

the case has not been noticed for trial and the parties may not even have completed

discovery. Consequently, we agree with the Court in Nu-Vision, that to establish a

“fair nexus” between the plaintiff’s claim and the property or properties subject to

a lis pendens by way of a “good faith, viable claim,” the proponent of the lis

pendens must make “a minimal showing that there is at least some basis for the

underlying claim [a]nd … show that he or she has a good faith basis to allege facts

supporting a claim and that the facts alleged would at least state a viable claim.”

Nu-Vision, 965 So. 2d at 236.

                                          7
      This is essentially the standard applied in Eurohome di Soleil, LLC v. The

Oaks Group, Inc., 912 So. 2d 1271 (Fla. 4th DCA 2005), where the parties

disagreed about the timing of a deposit due under the contract. In finding that the

lis pendens was proper, the court there stated:

                [a]lthough it may turn out that the parties intended that
                the second deposit was to be made in five days, the
                contract fails to specify when the second deposit is to be
                delivered. The court accordingly erred in dissolving the
                lis pendens on the ground that the buyer was in default, at
                this stage of the proceeding.

Id. at 1272. Other cases in which that minimal burden has been established include

Von Mitschke-Collande v. Kramer, 869 So. 2d 1246 (Fla. 3d DCA 2004), where

heirs showed that funds acquired through a breach of trust were used to purchase

the property at issue and so demonstrated a potential constructive trust in the

specified property, and J.B.J. Investment of South Florida, Inc. v. Maslanka, 163

So. 3d 726, 728 (Fla. 5th DCA 2015), where the proponent of the lis pendens

presented “substantial evidence” which demonstrated that the subject property was

intended to be included in a mortgage or that it was entitled to an equitable lien on

the property.

      There are many cases in which the proponent of the lis pendens has been

found unable to meet even the minimal burden described in Nu-Vision.             For

example, in Blue Star Palms, LLC v. LED Trust, LLC, 128 So. 3d 36 (Fla. 3d

DCA 2012) the court declined to enforce the lis pendens because the claims

                                            8
alleged were against a subsidiary corporation and not the condominiums subject to

the lis pendens. As the court there stated:

             A complaint which will not support a claim against the
             specific property at issue cannot provide a basis for tying
             it up by a filing of notice of lis pendens. … When a
             plaintiff can be afforded complete relief on a claim
             without reference to the title to the real property, a lis
             pendens cannot be maintained. Under the Florida cases a
             lis pendens is proper only when the required relief might
             specifically affect the property in question. [internal
             citations and quotations omitted].

Id. at 38-39. See also, Nobe Bay Holdings, LLC v. Garcia, 140 So. 3d 693 (Fla. 3d

DCA 2014) (holding the claim was unprovable because the plaintiff had agreed to

limit his claim to money damages); India America Trading Co. v. White, 896 So.

2d 859 (Fla. 3d DCA 2005) (finding claim for specific performance was

unprovable because it was based on an oral contract which was unenforceable

under the statute of frauds).

      Applying the standard of a minimal showing that there is at least some basis

for the underlying claim and a good faith basis to allege facts that would at least

state a viable claim, we conclude that Regents met that standard.          Regents’

showing that its claims arose out of a written contract for sale of the subject

properties established a “fair nexus” to the properties and its Interrogatory answers

swearing that it was ready, willing and able to close on the closing date, together

with evidence that Bankers was not able to close because of the outstanding lot

clearing liens against the property,
                                          9
provided a sufficient minimal basis to support either a claim that Regents could

have performed or that its performance was excused. Consequently, we find that

the trial court should not have discharged the lis pendens and reverse with

instructions that it be reinstated. We add that this opinion concerns solely the issue

of the discharge of the lis pendens. We do not address, nor should it be inferred

that we have reached any conclusion about, Regents’ ultimate ability to sustain its

claim for specific performance. These are two entirely different issues.

      Reversed and remanded with instructions to reinstate the lis pendens.

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