Law School Case Brief
Palm Lake Partners II, Ltd. Liab. Co. v. C & C Powerline, Inc. - 38 So. 3d 844 (Fla. Dist. Ct. App. 2010)
Specific performance may be granted only when (1) the plaintiff is clearly entitled to it, (2) there is no adequate remedy at law, and (3) the judge believes that justice requires it. The granting of specific performance rests largely in the discretion of the judge, but the right to exercise this judicial discretion does not extend to the power or authority to contravene the legal requirements which must exist to give a litigant grounds upon which he may invoke the remedy.
Appellant buyers Palm Lake and Falcon Lake sought review of an adverse judgment of the Circuit Court for Duval County (Florida) in a breach of contract action brought by purported third-party beneficiary C&C Powerline. Appellee sellers filed a cross-appeal, seeking review of the denial of the full extent of the award of specific performance they sought and denial of their claim for declaratory relief. Instead of awarding damages, the Circuit Court granted the sellers specific performance--the construction of an access road with infrastructure for electrical.
The sellers owned a 55-acre parcel in Jacksonville that Palm Lake Drive bisects, as well as a strip of property abutting the 55-acre parcel to the north. C&C operates a business on 30 acres still farther north, and relies on Palm Lake Drive for access to its own property. When C&C's owner, Chuck Chitty, learned a comprehensive plan amendment--to change the land use designation of Sellers' parcel from industrial to residential--was under consideration, he spoke to Sellers' representative, Barry Hurtz. Mr. Chitty was concerned that new residents might complain about truck traffic. Eventually, Chitty and Hurtz verbally agreed that C&C would not, in exchange for construction of an alternate access road to C&C's property, object to any comprehensive plan amendment reclassifying the sellers' property as residential.
On May 1, 2005, the sellers and Palm Lake signed the purchase agreement, which (wholly unbeknownst to C&C at the time) provided: "The parties acknowledge that it will be necessary to build an access road from a city street north of the property across adjacent property that the seller owns to Main Street. The purpose of the access road is to provide alternative ingress and egress to adjacent property owners to the north of the property."
Only after closing did developers-buyers Palm Lake and Falcon Lake obtain engineering plans for the access road and FDOT approval of a connection to Main Street. It became apparent that a portion of the access road was proposed to run along a section of Noah Road on ground that guy wires steadying Jacksonville Electric Authority (JEA) power lines already occupied. JEA advised all concerned that relocating the guy wires would cost some $ 800,000, that it would take a long time to engineer, and that guy wires might soon be unnecessary altogether because of changes JEA contemplated making in the power grid system
Apprised of the situation, C&C filed the complaint, asserting doubt as to its rights under the ordinance and requesting declaratory judgment. C&C also alleged that it was a third-party beneficiary of the purchase agreement between the sellers and Palm Lake, and that Palm Lake had breached the agreement. C&C sought temporary and permanent injunctive relief, including a ban on leasing residential units until an access road was constructed.
In an action for breach of a contract to purchase real property, was specific performance in the form of building an access road available as a remedy?
On the main appeal, the Court of Appeal of Florida reversed the judgment that required Palm Lake and Falcon Lake to build a road; this also disposed of the specific performance prong of the sellers' cross-appeal. The Court remanded with directions that the trial court award Sellers liquidated damages as specified in the easement and road construction agreement between the sellers and Palm Lake. As to the remaining portion of the cross-appeal otherwise, the Court affirmed: The sellers were not entitled to bypass administrative remedies in order to pursue judicial remedies, even declaratory judgment.
The Court looked to the rule that a promisor and a promisee can by agreement create a duty to a beneficiary which cannot be varied without his consent, but in the absence of such an agreement the parties retain control over the contractual relation they have created. The trial court erred in concluding that the purchase agreement, which allowed for amendments, created an immutable obligation on the buyers' part to construct an access road for the benefit of a third-party. The sellers promised the third-party an alternative access road without specifying who would finance or build the road, and without indicating that anyone other than the sellers themselves would be responsible for construction of the road. In fact, the third-party was not even aware that the sellers and the buyers had entered into the purchase agreement. Accordingly, there was no justifiable, detrimental reliance by the third-party C&C as a matter of fact and law. Thus, the trial court erred in entering judgment in third-party C&C's favor. The trial court also erred in failing to recognize that an easement and road construction agreement modified and superseded the purchase agreement and contained a liquidated damages clause. Accordingly, specific performance was not available. Finally, the trial court properly denied the sellers' crossclaim, seeking a declaration of the rights and duties of the parties under a city ordinance, for failure to exhaust administrative remedies.
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