WSC-L Lakeside Investors V, LLC v. Pulte Home Corporation et al

Filing 71

ORDER denying 52 Motion for summary judgment; denying 61 Motion for summary judgment; denying 66 Motion in limine; denying 66 Motion to strike and the Court will set the case for trial as soon as possible. Signed by Judge Elizabeth A. Kovachevich on 4/22/2010. (SN)

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UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

W S C - L L A K E S I D E I N V E S T O R S V, L L C ,
Plaintiff,

v.
PULTE HOMES CORPORATION and

C a s e No.: 8 : 0 8 - c v - l 6 9 4 - 1 7 T B M

PULTE HOMES, INC.,
Defendants.
/

ORDER ON PLAINTIFF'S MOTION IN LIMINE, MOTION TO STRIKE, AND
MOTIONS FOR SUMMARY JUDGMENT

This cause came before this Court pursuant to a Motion In Limine and Motion to Strike

filed by WSC-L Lakeside Investors V, LLC (WSC-L) (Doc. 66), as well as a response (Doc. 67).
These motions were filed by WSC-L after both WSC-L and Pulte Home Corporation (Pulte) and

Pulte Homes, Inc. ("Pulte Parent") (collectively "Pulte Parties" or -'Defendants") filed motions

for Summary Judgment. Areview of the record indicates that for the following reasons, the
Motion In Limine and the Motion to Strike shall be DENIED and the Motions for Summary

Judgment shall be DENIED. The following facts arc adopted only lor purpose, of resolving
pending motions.
BACKGROUND

In Spring 2007, aprincipal of WSC-L, began contacting the Pulte Companies concerning
Plaintiffs desire to purchase a tract of land (the "Subject Property") in Pasco County. Florida

containing approximately 760 lots. WSC-L is ajoint venture formed by a Tampa-based land developer, Landeavor LLC, and a Chicago real estate investment firm, Walton Street Capital

LLC. Pulte Parent is a Michigan corporation with its principal place o f business in Michigan.
The subsidiaries o f Pulte Parent conduct business in the homebuilding and financial services

industries. Pulte is a Michigan corporation with its principal place of business in Michigan and

engages in homebuilding services in Florida. The Subject Property is part of a residential community commonly known as the Lakeside Community. The Lakeside Community was divided into three developmental phases, Phase I containing 407 lots and Phases II and III
containing a combined 445 lots.

On December 21, 2007 WSC-L sent a letter to the Defendants expressing its interest in

purchasing the Subject Property. A representative ofthe Defendants accepted and agreed to
WSC-L's letter of intent to purchase on December 24,2007. On or about December 31, 2007, Pulte and WSC-L formally executed the Purchase Agreement, whereby WSC-L agreed to

purchase and Pulte agreed to sell the Subject Property. Also occurring on tin. date. I'ulic Parent
executed the Guarantee of Pulte Parent (the -Guarantee"). Pursuant to the Guarantee. Pulte

Parent guaranteed "payment ofall amounts due and/or performance ofall obligations ol [PulteJ
that arise after Closing, regardless of whether or not such obligations relate to matters that
o c c u r r e d before or a f t e r C l o s i n g . "

The Purchase Agreement contained a "General Disclaimer" through which Pulte

represented that the Subject Property was being sold on an as is basis. Section 4.2 ofthe Purchase Agreement also set forth that WSC-L had a duty to conduct due diligence examinations on the property. Due to the short period of time in which this contract was entered into, the Purchase Agreement also contained 25 warranties and representations relied upon by WSC-L
which s u r v i v e d the c l o s i n g for six months.

Included in the Purchase Agreement, the Defendants did state the monetary amount o f impact fee credits that had been paid to that date. Section 7.12(n) o f the Purchase Agreement specifically states that:

Seller has paid to Pasco County the Impact Fee Credits, which constitute all Pasco County requisite prepaid impact fees in connection with such Utilities Sendee Agreement in order to secure capacity for all of the units within Phase 1 of the Property pursuant to the Utilities Service Agreement. The Impact Fee Credits are currently held in an account with Pasco County, which account initially contained S418,396 and which contains $227,188 as o f the date hereof. The Impact Fee Credits are assignable by Seller to Buyer
as the sole b e n e f i c i a r y thereof.

In §1.2 of the Purchase Agreement, impact fee credits had been defined as:

.. .those certain impact fee credits currently held in an account with Pasco County, which credits could be applied against impact fees payable to the appropriate governmental
authorities in connection with the development and construction of improvements on the
Property.

On January 9, 2008 Pasco County mailed to the Defendants a letter advising them that the

"final 50% payment of the service commitment fees" for the Subject Property were due on or

before Febmary 29, 2008. The amount due was $418,396 that needed to be paid to satisfy the remaining fifty percent. The Defendants subsequently forwarded this information on to WSC-L.
WSC-L timely paid the amount owed to mitigate any damage that may result from failure to pay. Subsequently. WSC-L informed the Defendants of its intent to bring suit pursuant to the
Purchase Agreement.

On or about August 28, 2008, WSC-L filed a complaint against the Defendants

containing five counts. In November of 2008 WSC-L, amended its complaint, reasserting the same claims against the Defendants. On January 13, 2009 the parties stipulated to dismiss with prejudice Counts IV and Vof the Amended Complaint. Further, on April 22, 2009, this Court
entered an Order dismissing Count II of the Amended Complaint. The two remaining counts are

Count I against Pulte for breach of contract and Count III against Pulte Parent for breach of

guarantee. Both WSC-L and the Defendants subsequently filed a Motion for Summary Judgment on the remaining Counts. On November 9, 2009, WSC-L filed the instant Motion In
Limine and Motion to Strike.
DISCUSSION

WSC-L argues that, absent any ambiguity, the intent of the parties should be determined from the contract itself, without resort to extrinsic evidence. WSC-L also notes that any extrinsic

evidence they have placed before the Court in their pending summary judgment motion or their

opposition to motion for summary judgment filed by Defendants would also then be inadmissible
if the Court were to grant the present motions. Alternatively, they also argue that if the Court
determined that there was a latent ambiguity in the contract then this would be a material issue ol

fact that would preclude summary judgment. Defendants argue that the Court is to consider all

of the "surrounding circumstances" concerning the Purchase Agreement; only evidence ol prior

negotiations should be excluded from consideration. The Defendants further argue that even if
the Court is to find an ambiguity, WSC-L has confused the distinction between patent
ambiguities and latent ambiguities.

When interpreting a contract, the court must first examine the plain language of the
contract for evidence of the parties' intent. Roval Oaks Landing Homeowner's Ass'n Inc. v.

Pelletier, 620 So.2d 786, 788 (Fla. 4th DCA 1993). Absent some ambiguity, the intent of the

parties to a written contract must be ascertained from the words used in the contract, without
resort to extrinsic evidence. Wheeler v. Wheeler. Erwin & Fountain. P.A.. 964 So.2d 745. 749

(Fla. 1st DCA 2007). It is also generally accepted that the language of a contract cannot be

properly understood if it is read without attention to Ihe circumstances surrounding the creation
of the contract. Fla. E. Coast Rv. Co. v. CSX Transp., 42 F.3d I 125, I 129 (7th Cir. 1994)

4

(applying Florida law). In the instant case, the surrounding circumstances show that each party
acted to close this sale o f the Subject Property in a very short period o f time. I f this Court finds

that the Purchase Agreement is unambiguous, then the intent of the parties must be determined
from an examination o f the Purchase Agreement and the circumstances surrounding its
formation. However, the Purchase Agreement is not unambiguous.

Whether an ambiguity exists is a question of law. Wheeler. 964 So.2d 745, 749 (Fla. 1st DCA 2007). There are two types of ambiguities that a document may contain. These are patent

and latent ambiguities. A patent ambiguity is one that is appears on the face of the contract and
arises from the use of defective, obscure, or insensible language. Emergency Associates of
Tampa. P.A. v. Sassano. P.O.. 664 So.2d 1000, 1002 (Fla. 2nd DCA 1995) oiling Ace Elec.

Supply Co. v. Teiran Nova Elec. Inc., 288 So.2d 544 (Fla. 1st DCA 1973). A latent ambiguity
arises when a contract on its face appears clear and unambiguous but it fails to specify the rights

or duties of the parties in certain situations. Wheeler. 964 So.2d 745. 749-750 (Fla. 1st DCA

2007). A latent ambiguity has similarly been defined as "an ambiguit) that does not readilv appear in the language of a document, but instead arises from a collateral matter when the
document's terms are applied or executed." Black's Law Dictionary (8th ed. 2004). The Purchase Agreement entered into between WSC-L and the Defendants contains a latent
ambiguity.

In the instant case there is a latent ambiguity in the statement in §7.12(n) of the Purchase

Agreement where it says that the Pulte Parties have paid " to Pasco County the Impact Fee
Credits, which constitute all Pasco County requisite prepaid impact fees..." On its face, this statement appears to be unambiguous. However, in its application, the statement can be

interpreted two ways. It can be interpreted, as Pulte Parties contend, that all prepaid impact fees

owing on the date of the Purchase Agreement have been paid; however, any future amounts would be the responsibility of the purchaser, WSC-L. The statement can also be interpreted, as it

is by WSC-L, to mean that any and all impact fee credits on this property have been paid by the
Pulte Parties and that there is nothing further, by way of impact fee credits, that will ever have to
be paid as it relates to the Subject Property.

If a latent ambiguity exists, extrinsic evidence is admissible regarding the intent of the

parties to a contract. Wheeler, 964 So.2d 745, 749 (Fla 1st DCA 2007). However, because the
latent ambiguity requires resolution by resort to extrinsic evidence, a question of fact is

presented. Id When a latent ambiguity exists, a question of material fact is presented: thus, the
issue of the correct interpretation of the agreement is an issue of fact which precludes summary

judgment." Mac-Gray Services. Inc. v. Savannah Associates of Sarasota. LLC, 915 So.2d 657

(Fla 2d DCA 2005). Therefore, the Motion In Limine and Motion to Strike shall be denied
because there is a latent ambiguity in the Purchase Agreement. To determine the intent of the

parties when a latent ambiguity exists in the document extrinsic evidence must be admitted.
However, the existence of a latent ambiguity also creates a material issue offact that precludes
the entry of Summary Judgment. Accordingly it is,

ORDERED t h a t t h e P l a i n t i f f s M o t i o n I n L i m i n e a n d M o t i o n to S t r i k e is D E N I E D .

Defendant's Motion for Summary Judgment and Incorporated Memorandum o f Law is
D E N I E D , and W S C - L L a k e s i d e Investors V. L L C ' s Motion for Final S u m m a r y J u d g m e n t is D E N I E D . T h e C o u r t will s e t this case for trial with all e x p e d i e n c y .

DONE and ORDERED in Chambers, in Tampa, Florida tlu^-^yglg) of April 2010.

Cc: All P a r t i e s a n d C o u n s e l o f R e c o r d