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John C. Berkery, Sr. v. Newton C. Pratt, 09-11425 (2010)

Court: Court of Appeals for the Eleventh Circuit Number: 09-11425 Visitors: 95
Filed: Aug. 03, 2010
Latest Update: Feb. 21, 2020
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT FILED _ U.S. COURT OF APPEALS ELEVENTH CIRCUIT No. 09-11425 AUGUST 3, 2010 _ JOHN LEY CLERK D. C. Docket No. 08-14146-CV-JEM JOHN C. BERKERY, SR., Plaintiff-Appellant, versus NEWTON C. PRATT, CONNIE PRATT, Defendants-Appellees. _ Appeal from the United States District Court for the Southern District of Florida _ (August 3, 2010) Before BIRCH, MARCUS and BALDOCK,* Circuit Judges. * Honorable Bobby R. Baldock, United S
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                                                                      [DO NOT PUBLISH]


                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT            FILED
                              ________________________ U.S. COURT OF APPEALS
                                                                      ELEVENTH CIRCUIT
                                    No. 09-11425                        AUGUST 3, 2010
                              ________________________                    JOHN LEY
                                                                           CLERK
                          D. C. Docket No. 08-14146-CV-JEM

JOHN C. BERKERY, SR.,


                                                                        Plaintiff-Appellant,

                                           versus

NEWTON C. PRATT,
CONNIE PRATT,


                                                                     Defendants-Appellees.


                              ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                            _________________________

                                      (August 3, 2010)

Before BIRCH, MARCUS and BALDOCK,* Circuit Judges.


       *
        Honorable Bobby R. Baldock, United States Circuit Judge for the Tenth Circuit, sitting
by designation.
PER CURIAM:

      John C. Berkery (“Berkery”), pro se, appeals the district court’s order

granting summary judgment in favor of Newton and Connie Pratt (“the Pratts”),

pro se, in a diversity jurisdiction suit alleging breach of contract and fraud. On

appeal, Berkery argues that a Letter of Intent (“LOI”), signed by all parties,

constituted a binding contract for the sale of real property. We AFFIRM the

district court’s grant of summary judgment in favor of the Pratts.

                                 I. BACKGROUND

      On 27 March 2008, Berkery approached the Pratts at their home in Jensen

Beach, Florida (“the property”) responding to a front-yard sign advertising sale of

the property. R1-1 at 2. After a brief tour/discussion and offer/counter-offer,

Berkery and the Pratts agreed to a sale price of $300,000. 
Id. at 2,
Exh. A at 1.

      On 31 March 2008, Berkery again met the Pratts at the property producing

the LOI. 
Id. The LOI
stated, inter alia, the following: “. . . the parties . . . hereby

warrant and assert that they intend to be mutually and legally bound by the terms

of this Letter of Intent in lieu of and pending the execution of a formal

contract/Agreement of Sale.” R1-1, Exh. A at 1. The LOI described the property,

and set forth the sale price, the seller’s warranties, the buyer’s financing

contingency, when the buyer’s deposit would be due, and when the settlement of



                                            2
the property would occur. 
Id. It did
not include any language regarding

occupation of the property after the sale nor allocation of closing costs. See 
id. All parties
signed the LOI. 
Id. at 2.
      Shortly after execution of the LOI, the Pratts’ attorney sent Berkery an

Agreement of Sale (“AOS”) with a special addendum attached. See R1-1, Exh. C;

R1-23 at 2-3. The AOS was a form “‘As Is’ Contract for Sale and Purchase,”

approved by the Florida Association of Realtors and the Florida Bar. See 
Id. The addendum
(1) acknowledged that the property water well was not working, so the

Pratts could opt to either fix the well or give Berkery a $2,500 credit at closing,

(2) described a timeline and rent fee for the Pratts to remain in the property after

closing, and (3) addressed the payment of certain closing costs. See R1-23 at 3;

R1-1 at 3-4; R1-1 Exh. C at 1, 11. Soon after receiving the AOS, Berkery returned

it to the Pratts, signed, but with changes made to the agreement’s addendum. R1-1

Exh. C at 1-2. Berkery sought to clarify (1) that the Pratts were responsible for

paying the full Stamp Tax, and (2) the terms under which the Pratts could stay in

the property as renting tenants. 
Id. at 1.
      On 17 April 2008, the Pratts wrote to Berkery to announce the termination

of “any further negotiations . . . regarding the subject real property.” R1-1 Exh. B.

The Pratts explained that they sent the AOS to Berkery in good faith compliance



                                             3
with the LOI and that Berkery's changes were unacceptable. 
Id. Berkery filed
suit in the United States District Court for the Southern

District of Florida alleging breach of contract and fraud, and seeking both specific

performance and damages. R1-1. The Pratts filed a motion to dismiss, which was

converted into a motion for summary judgment by an assigned magistrate judge on

15 September 2008. R1-21. The magistrate judge gave the Pratts fourteen days to

submit evidence and Berkery fourteen days thereafter to respond. 
Id. at 2.
The

Pratts had an additional seven days to respond to Berkery’s submissions. 
Id. The Pratts
submitted an affidavit in support of their motion for summary

judgment on 29 September 2008. R1-22. Berkery did not submit any evidence to

defeat the Pratts’ motion for summary judgment. The magistrate judge issued a

report and recommendation on 6 October 2008, finding, inter alia, that the LOI did

not hold itself out as a purchase contract, but rather contemplated the execution of

a formal sale contract in the future. R1-23 at 2. The magistrate judge further

found that Berkery failed to state a viable fraud claim. 
Id. at 9-11.
      Berkery filed objections to the magistrate judge’s report and

recommendation. R1-25. Thereafter, the district court adopted the report and

recommendation and granted the Pratts’ motion to dismiss on 23 February 2009.

R1-27 at 1-2.



                                           4
      On appeal, Berkery argues that the LOI was a binding contract and that the

AOS was not a continued negotiation but was instead meant to reflect the terms of

the LOI. Concerning summary judgment procedures, Berkery alleges that while it

was not necessary for him to submit any evidence – because the Pratts did not

submit evidence not already contained in the record – he nevertheless argues that

he was not afforded a meaningful opportunity to respond to the Pratts’ 29

September submission. Finally, Berkery argues that he adequately pled fraud.

                                 II. DISCUSSION

      We review the district court’s grant of summary judgment de novo, viewing

the evidence in the light most favorable to the nonmoving party. Thomas v.

Cooper Lighting, Inc., 
506 F.3d 1361
, 1363 (11th Cir. 2007) (per curiam).

Summary judgment is appropriate when “there is no genuine issue of material fact

and . . . the moving party is entitled to judgment as a matter of law.” 
Id. (quoting Fed.
R. Civ. P. 56(c)). “Pro se pleadings are held to a less stringent standard than

pleadings drafted by attorneys and will, therefore, be liberally construed.”

Tannenbaum v. United States, 
148 F.3d 1262
, 1263 (11th Cir. 1998) (per curiam).

As a federal court sitting in diversity, we must apply Florida law to this case. See

Erie R.R. Co. v. Tompkins, 
304 U.S. 64
, 80, 
58 S. Ct. 817
, 823 (1938).




                                          5
A. Whether The LOI Was a Binding Real Estate Contract

       In Florida, “courts will recognize a contract so long as no essential terms

remain open for consideration and negotiation.” W.R. Townsend Contracting, Inc.

v. Jensen Civil Const., Inc., 
728 So. 2d 297
, 301 (Fla. 1st Dist. Ct. App. 1999).

This means there must be a “meeting of the minds” on all essential terms of the

contract. De Vaux v. Westwood Baptist Church, 
953 So. 2d 677
, 681 (Fla. 1st Dist.

Ct. App. 2007). “The fact that other, non-essential terms remain open is not fatal”

to a breach of contract claim. W.R. 
Townsend, 728 So. 2d at 302
. In addition, “the

law recognizes that parties can have an enforceable contract binding them to

prepare and execute a subsequent agreement.” Plumbing Serv. Co. v. Progressive

Plumbing, Inc., 
952 So. 2d 1211
, 1214 (Fla. 5th Dist. Ct. App. 2007).1 In other

words, the mere fact that the parties contemplate memorializing an agreement

containing all essential terms in a formal document does not prevent their informal

agreement from taking effect prior to that event. See W.R. 
Townsend, 728 So. 2d at 302
.

       What constitutes an “essential term” varies according to the nature and

complexity of the transaction and must be evaluated on a case by case basis. King


       1
         We note that the district court erred in its conclusion that “a statement of intent to
contract in the future is not enforceable in Florida.” R1-27 at 1 (citing LaFarge North America,
Inc. v. Matraco Colorado, Inc., No. 07-80112-CIV, 
2008 WL 2277503
(S.D. Fla. 2008)).
Indeed, such a contract is “well recognized.” W.R. 
Townsend, 728 So. 2d at 302
.

                                                6
v. Bray, 
867 So. 2d 1224
, 1228 (Fla. 5th Dist. Ct. App. 2004). In a typical real

estate transaction, examples of essential terms of the contract include the

identification of all property, Louis Sherry Assocs., Inc. v. Opatut, 
414 So. 2d 1148
(Fla. 3d Dist. Ct. App. 1982) (per curiam), and identification of all parties and

financing terms, David v. Richman, 
568 So. 2d 922
, 924 (Fla. 1990). “[A] contract

for the sale of realty, like other contracts, must [also] be supported by

consideration.” Parker v. Weiss, 
404 So. 2d 820
, 821 (Fla. 1st Dist. Ct. App. 1981)

(per curiam). “The consideration which creates a valid contract for the sale of real

property is the purchaser’s promise to pay.” Peterson Homes, Inc. v. Johnson, 
691 So. 2d 563
, 564 (Fla. 5th Dist. Ct. App. 1997) (citing 
Parker, 404 So. 2d at 821
).

Thus, no portion of the deposit needs to be paid at the signing of the agreement for

there to be a valid contract. 
Id. At issue
in this case was whether the LOI contemplated all the essential

terms of a real estate transaction. Notably, the LOI was silent as to possession of

the property, allocation of certain closing costs, and issues concerning the property

water supply. Regarding these issues specifically, Florida Courts of Appeal are in

disagreement. Compare Cohodas v. Russell, 
289 So. 2d 55
, 57 (Fla. 2d Dist. Ct.

App. 1974) (listing document stamps and other standard closing costs as “details

determinable” rather than “essential elements to form a contract”) with Grover v.



                                           7
Jacksonville Golfair, Inc., 
914 So. 2d 995
, 996 (Fla. 1st Dist. Ct. App. 2005) (per

curiam) (including “allocation of closing costs” under “essential terms”). The

Florida Supreme Court has listed examples of “essential elements” of a real estate

contract as “matter of consideration, manner of payment, security for deferred

payments, interest, dates when they shall become due, [and] acts to be done by

either party.” Rundel v. Gordon, 
111 So. 386
, 389 (Fla. 1927).

      Applying Florida Supreme Court precedent to the specific facts at hand, we

find that items essential in the aggregate to the real estate contract in this case

include: (1) allocation of closing costs, (2) description of property possession or

occupancy during and after the pending sale period, and (3) allocation of

responsibility for necessary utility repairs. See 
id. Accordingly, we
find that the

LOI is not an enforceable real estate contract.

B. Whether Not Allowing Berkery Time to Submit Evidence Was Harmless Error

      District courts must give nonmovants a meaningful opportunity to respond

to motions for summary judgment. Burns v. Gadsden State Cmty. Coll., 
908 F.2d 1512
, 1516 (11th Cir. 1990) (per curiam). We strictly enforce the ten day notice

requirement in Fed. R. Civ. P. 56(c). 
Id. Specifically, the
nonmovant must have

ten days to respond to the evidence submitted by the moving party “before the

court takes the summary judgment issue under advisement.” 
Id. at 1517.


                                            8
However, we have also applied a harmless error standard in cases where the record

shows the parties were well aware of the summary judgment motion and the parties

made all arguments and submitted all documents they would have presented had

they received the notice to which they were entitled. Prop. Mgmt. & Invs., Inc. v.

Lewis, 
752 F.2d 599
, 605 (11th Cir. 1985).

      After the Pratts’ motion to dismiss was converted to a motion for summary

judgment on 15 September 2008, the magistrate judge gave the Pratts fourteen

days to submit evidence, and Berkery fourteen days thereafter to respond. The

Pratts submitted an affidavit in support of their motion for summary judgment on

29 September 2008, and the magistrate judge issued a report and recommendation

on 6 October 2008. While this timeline did not allow Berkery an opportunity to

respond to evidence submitted, Berkery concedes that he would not have submitted

any additional evidence. Everything submitted by the Pratts was already in the

record. Appellant’s Initial Brief at 26. Because the Pratts did not submit

additional evidence, this timeline error is harmless and is not grounds for remand.

Lewis, 752 F.2d at 605
.

C. Whether Berkery Adequately Pled Fraud

      Berkery argues that he adequately pled fraud because his complaint included

the “who, what, when, where, and how” of the alleged fraud. Appellant’s Initial



                                          9
Brief at 20. While Berkery admits that a fraud claim may merge into a breach of

contract claim, he contends that the fraud took place after the Pratts already

breached the contract, and therefore, stands alone as a separate cause of action.

Essentially, Berkery argues that the Pratts honestly entered into the contract, but

only after they found a “more favorable” buyer did they decide to breach the

contract. 
Id. To state
a cause of action for fraud in Florida, the plaintiff must allege:

(1) the defendant made a false representation of material fact, (2) the defendant

knew that the representation was false, (3) the defendant made the representation

for the purpose of inducing the plaintiff to act in reliance thereon, and (4) the

plaintiff’s injury was caused by justifiable reliance on the representation. Babbit

Elecs., Inc. v. Dynascan Corp., 
38 F.3d 1161
, 1176-77 (11th Cir. 1994) (per

curiam).

      Here, Berkery failed to plead fraud with particularity because his allegations

were generic statements. For example, Berkery concluded that the Pratts “made a

fraudulent utterance” but failed to state what that utterance was, when it was made,

or how that utterance benefitted them. R1-1 at 6. The district court, however, did

not dismiss this count for failure to state a claim. Even after the district court

allowed Berkery’s fraud claim to proceed to the summary judgment stage, Berkery



                                           10
still failed to provide evidence detailing how the Pratts’ alleged misrepresentation

– their unwillingness to sell the property – benefitted them. Moreover, Berkery

admits on appeal that the misrepresentation was not false when made, but only

became false once a more favorable buyer was found. This type of fraud is

interwoven with Berkery’s breach of contract claim because the misrepresentation

relates to the Pratts’ non-performance of the contract and does not give rise to a

separate cause of action. See Amoco Oil Co. v. Gomez, 
379 F.3d 1266
, 1272 n.18

(11th Cir. 2004) (stating that under Florida law, misrepresentations related to the

breaching party’s performance of the contract are interwoven with the breach of

contract and do not give rise to an independent cause of action). We find that

Berkery’s fraud claim fails because he puts forth no argument distinct from those

related to the Pratt’s non-performance.

                                III. CONCLUSION

      Berkery appeals the district court’s order granting summary judgment in

favor of the Pratts in a suit alleging breach of contract and fraud. We conclude the

district court did not err in granting summary judgment because: (1) the LOI was

not an enforceable real estate contract; (2) the timeline not allowing Berkery to

respond to evidence submitted by the Pratts before the magistrate judge’s report is

harmless error; and (3) Berkery’s fraud claim fails because the alleged



                                          11
misrepresentation on the part of the Pratts was interwoven with Berkery’s breach

of contract claim. Accordingly, we AFFIRM the district court’s grant of summary

judgment in favor of the Pratts.

      AFFIRMED.




                                        12

Source:  CourtListener

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