Henrion v. New Era Realty IV, Inc.

Citations: 586 So. 2d 1295; 1991 Fla. App. LEXIS 15464; 1991 WL 193336Docket: No. 90-2890

Court: District Court of Appeal of Florida; October 2, 1991; Florida; State Appellate Court

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In April 1982, Joseph M. Henrion and Lois L. Henrion engaged New Era Realty IV, Inc. to sell their property at 817 North Dixie Highway, Lake Worth, Florida, aiming to secure nearly $50,000 for a down payment on an insurance agency. An auction was scheduled for July 24, 1982, in which Shook and Greenway submitted the highest bid of $70,500 but later refused to close the sale due to discovering that the property was 1,200 square feet instead of the advertised 1,760 square feet, citing material misrepresentation. This refusal led the Henrions to unsuccessfully seek other buyers, resulting in the termination of their purchase agreement for the insurance agency.

The Plaintiffs' Third Amended Complaint includes three counts, with count III focusing on the professional negligence of New Era Realty IV, Inc. Claims for general damages, lost profits, and decreased corporate stock value for A.W. Nordman and J.M. Henrion, Inc. are specified. New Era Realty's defenses include estoppel based on the information provided by the Plaintiffs, their comparative negligence, and failure to mitigate damages. The Henrions settled with Jim Graham and Jim Graham, Inc., leading to a dismissal of claims against them. A default was entered against Heavener-Ogier Services, Inc. for not responding to discovery.

Key stipulated facts include the execution of an Exclusive Right of Sale Agreement on April 22, 1982, the role of Dianne Purcell as an authorized agent of New Era Realty, and the confirmation of the auction by Jim Graham, Inc. Additionally, it is noted that the Henrions informed the realty agents of their intent to use the sale proceeds for another business purchase, and that New Era Realty was covered by an errors and omissions insurance policy for claims up to $1,000,000 during the relevant period. Realtor Ethics Rule 16.05 emphasizes the broker's responsibility to thoroughly understand the property to prevent false representations.

Knowledge of the property's location, surrounding types of property, transportation access, and local conditions is essential for assessing its suitability for proposed uses. The broker should be aware of recent sales prices of similar properties, the nature and extent of liens, and potential tax impacts, although opinions on the title should not be expressed. Additionally, understanding the age, original cost, and condition of buildings, as well as both positive and negative attributes of the property, is crucial. For income-producing properties, the broker should gather information regarding income generation and potential.

The legal issues for trial include: 
A. Whether NEW ERA REALTY IV, INC. negligently breached or performed its Listing Contract with Plaintiffs; 
B. The amount of damages Plaintiffs suffered; 
C. Whether Plaintiffs are estopped from making their claims; 
D. Whether any Plaintiffs were comparatively negligent; 
E. Whether Plaintiffs failed to mitigate damages; 
F. Custom and usage in the real estate business.

A jury trial commenced on February 29, 1988, focusing on negligence. The jury found negligence by Defendants, attributing 70% of the fault to Plaintiffs and 30% to Defendants, awarding total damages of $345,000. Following the verdict, New Era Realty IV sought a new trial, arguing that Plaintiffs failed to prove the existence of a contract or that damages were too speculative. They later contended that the damages were not recoverable in a tort action, referencing prior case law.

The trial court granted the motion for a new trial, allowing Plaintiffs to amend their pleadings to assert a breach of contract claim, which was subsequently dismissed for failing to state a cause of action. American Pioneer, New Era's insurer, also had a dismissal with prejudice for lack of coverage on breach of contract claims. Both parties expressed dissatisfaction with the trial court’s procedural decisions, particularly regarding the amendment of pleadings after the verdict and the basis for the trial. However, these complaints were not explicitly presented as separate points on appeal.

The panel expresses strong concern regarding the abandonment of pretrial stipulations following a verdict, as well as the granting of a second jury trial after a verdict has been rendered. This process is deemed to violate the precedent set in Arky, Freed, et al. v. Bowmar, 587 So.2d 561 (Fla.1988). The Defendants were allowed to escape an adverse jury verdict by introducing defenses that were neither pled nor part of their pretrial stipulation, and which contradicted the defenses presented by both parties’ written stipulations. The trial court's decision to grant a Motion for New Trial improperly absolved the parties of their stipulations. To withdraw from a stipulation, a party must file a reasonable motion supported by an affidavit demonstrating good cause, and no relief is warranted if the stipulation was entered into voluntarily without evidence of fraud, misrepresentation, or mistake. In this case, no such motion was filed, nor was there any indication of improper conduct by the Plaintiffs/Appellants that would justify relieving the Defendants/Appellees from their stipulation to pursue negligence/tort theories. Consequently, the orders from the lower court granting the Motion for New Trial and permitting further amendments are reversed, and the case is remanded for the entry of Final Judgment consistent with the verdict from March 4, 1988. Judges Glickstein, Farmer, and Streitfeld concur with this decision.