Jankus Part II - Rules against Plaintiff, however prior holding regarding 3-year statute of limitations not discussed


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Jankus v. Edge Investors, L.P., 650 F.Supp.2d 1248 (S.D.Fla. 2009)

 

This is a decision following a motion for reconsideration of a previous Jankus order. The original order held that a purchaser has up to three years after  signing a purchase agreement to bring a rescission claim under 15 U.S.C. §1703(c) of ILSA.  In their motion to reconsider, the buyers contended that the seller’s two-year obligation to complete plaintiffs’ unit under the seller’s claim of the Improved Lot Exemption was illusory because it was subject to extension for any matters that were legally recognized as defenses to contract actions in Florida. As such, the buyers argued that the contract gave the seller too much discretion to extend the completion date based on foreseeable and unforeseeable events, thereby rendering the two-year obligation illusory. After reconsidering its previous decision in favor of the buyers, the court found in favor of the seller on grounds that the  purchase agreement complied with the Improved Lot Exemption of 15 U.S.C. § 1702(a)(2).

 

The second Jankus court acknowledged a split of authority as to how the unconditional obligation rule found in Samara Development Corp. v. Marlow, 556 So.2d 1097, 1100 (Fla.1990) should be applied.  The Jankus court noted that most courts had not taken the “unconditionally obligate” language of Samara literally (citing Kamel v. Kencon/The Oaks at Boca Raton LP, 321 Fed. Appx. 807 (11th Cir. 2008)(unpub); Delaura v. Lennar Homes, Inc., 2009 U.S. Dist. LEXIS 65146 (M.D. Fla. 2009); Bloom v. Home Devco/Tivoli Isles, LLC, 2009 U.S. Dist. LEXIS 2257 (S.D. Fla. 2009)).  The court explained the difference of opinion on whether performance may be conditioned on matters going beyond pure “impossibility,” without forfeiting the exemption. According to the court, some decisions recognize that clauses excusing performance due to “acts of God” or causes beyond the control of the developer did not make the completion date illusory (citing Winterrowd v. Taylor Morrison Services, Inc., 2009 U.S. Dist. LEXIS 60875 (M.D.Fla. July 16, 2009); Adams-Lipa v. TDS Town Homes (Phase 1) LLC, 2009 U.S. Dist. LEXIS 53855 (M.D.Fla.2009).  Other decisions found a two-year completion obligation illusory where the contract did not limit the seller to defenses recognized as legal defenses under Florida law, but also  allowed as excusable delay events “caused by Buyer, acts of God, unavailability of materials, strikes and other labor problems, governmental orders or other events beyond seller's control.” (citing Santidrian v. Landmark Custom Ranches, Inc., 655 F. Supp. 2d 1260 (S.D.Fla.2009)).

 

Upon finding that the seller’s contract complied with the Improved Lot Exemption, the Jankus court held in favor of the seller.  The previous decision was also based on the timeliness of the buyers’ rescission efforts, an issue that  the court did not reconsider in its two year obligation opinion. With respect to the timeliness issue, it remains to be seen whether future courts will follow the Jankus court’s first ruling, or the Taylor/Murray lineage of cases, i.e., whether a buyer may have two or three years in which to rescind his/her contract.

 

This article does not constitute legal advice or the formation of an attorney-client relationship, and is not for re-publication without express permission of the Carmel & Carmel P.C.

 

The citation for the Jankus II decision is:

Jankus v. Edge Investors, L.P., 650 F.Supp.2d 1248 (S.D.Fla. 2009)

Please contact Aaron Eidelman at aeidelman@carmel.us if you have any comments or questions in regards to this article.

2009-09-02 20:15:00