Old Port Cove Holdings v. Old Port Condominium Association
SC07-1032
>> ALL RISE.
O YE, O YE, O YE.
SUPREME COURT OF FLORIDA IS NOW
IN SESSION.
ALL THOSE HAVING BUSINESS
BEFORE THIS COURT, DRAW NIGH,
GIVE ATTENTION, AND YE SHALL BE
HEARD.
GOD SAVE THE UNITED STATES, THE
GREAT STATE OF FLORIDA, AND
THIS HONORABLE COURT.
>> LADIES AND GENTLEMEN, THE
FLORIDA SUPREME COURT, PLEASE
BE SEATED.
>> GOOD MORNING, FRIENDS, AND
WELCOME TO THE FLORIDA SUPREME
COURT AND THE ORAL ARGUMENT
CALENDAR FOR THURSDAY,
APRIL 10TH.
BEFORE WE BEGIN THIS MORNING,
WE WOULD LIKE TO TAKE THE
OPPORTUNITY ON BEHALF OF THE
COURT TO WELCOME TO OUR SESSION
TODAY THE FLORIDA ELECTRIC
COOPERATIVES.
IT'S A GROUP OF I GUESS
STUDENTS AND ADULTS AND RISING
HIGH SCHOOL JUNIORS AND
SENIORS.
WOULD YOU ALL STAND SO WE COULD
RECOGNIZE THOSE OF YOU FROM,
FROM THAT GROUP?
MY GOODNESS.
A ROOMFUL.
WELCOME TO TALLAHASSEE AND THE
FLORIDA SUPREME COURT.
THANK YOU.
AND THOSE SPONSORS WHO'VE
BROUGHT THEM HERE, PARENTS AND
SPONSERS AND TEACHERS AND FOLKS
THAT, THAT WORK WITH YOUNG
PEOPLE.
THANK YOU VERY MUCH ON BEHALF
OF THE COURT.
THE FIRST CASE ON OUR CALENDAR
THIS MORNING IS OLD FORT COVE
HOLDERS V. OLD FORT COVE
CONDOMINIUM ASSOCIATION.
READY TO PROCEED?
>> MY NAME IS JACK AIELLO.
MAY IT PLEASE THE COURT, I
REPRESENT OLD PORT COVE
HOLDINGS AND EQUITIES AGAINST
OLD FORT COVE CONDOMINIUMS.
>> JUST FROM THE OUTSET, THIS
IS AN OLD COMMON LAW DOCTRINE
THAT WE DEALT WITH IN LAW
SCHOOL ABOUT HOW LONG PROPERTY
CAN BE HELD WITH CERTAIN
LIMITATIONS ON IT, AND IT
APPEARS THE COURTS ACROSS THE
NATION HAVE SPLIT ON IT.
THERE MAY BE A MINORITY AND
MAJORITY VIEW AND RECOGNIZING
FLOW THAT DEFINITELY DEALT WITH
THESE THINGS AS OPTIONS AND BE
THAT AS IT MAY, I WOULD LIKE
BOTH OF THE PARTIES TO ADDRESS
FOR US TODAY WHAT IMPACT AND
WHAT SOCIAL REASONING WOULD GO
INTO THE ADOPTION OF EITHER
VIEW?
WHAT IMPACT WOULD IT HAVE IF WE
TAKE YOUR VIEW AND WHY?
WHY SHOULD WE ACCEPT THAT
PARTICULAR PARTY'S VIEW?
AS PART OF FLORIDA LAW WITH THE
STATUTES WE HAVE AND JUST
THE UNDERLYING REASONING,
PLEASE.
>> YES, YOUR HONOR.
ADMITTEDLY, THE RULING THAT
THIS COURT MAKES WOULD AFFECT
OLDER INTERESTS.
THIS IS A 1977 AGREEMENT THAT
CREATED WHAT PURPORTED TO BE AN
UNLIMITED DURATION.
THERE IS A STATUTE NOW.
IT WAS ENACTED INITIALLY IN
1977 AND THEN REPEALED.
THE STATUTE THAT SURVIVES TODAY
WAS ENACTED REALLY IN 1988.
THAT STATUTE ON ITS FACE
APPLIES ONLY TO INTERESTS
CREATED AFTER OCTOBER 1ST,
1988, WHEN --
>> THERE'S ALSO AN AMENDMENT
ENACTED IN 2000.
>> AN AMENDMENT.
>> THAT ABROGATED IN
PERPETUITIES.
>> WE MAINTAIN GOING FORWARD
NOT RETROACTIVELY.
IN FACT, IF THE 2000 AMENDMENT
ABROGATES THE RULE AGAINST
PERPETUITIES GOING BACKWARD, IT
WOULD WIPE OUT --
>> YOU KNOW, I THINK IT WOULD
BE HELPFUL TO ME, SINCE WE
DON'T GENERALLY HAVE A
STIMULATING A SUBJECT AS A RULE
AGAINST PERPETUITIES FOR YOU
TO, TO START OFF FOR MY BENEFIT
AND PERHAPS FOR THE BENEFIT OF
OUR, THE GALLERY HERE AS TO
WHAT IS THE RULE AGAINST
PERPETUITIES FROM OUR POINT OF
VIEW.
>> OKAY, I WAS HOPING THAT
WOULD NEVER COME UP.
[LAUGHTER]
>> WASN'T THAT ON YOUR LAW
SCHOOL EXAMINATION?
>> I THINK THEY DIDN'T PUT IT
ON AN EXAM BECAUSE THEY HELD A
LAWYER COULDN'T BE HELD GUILTY
OF MALPRACTICE IF THEY DIDN'T
UNDERSTAND, SO IT WASN'T FAIR.
PERPETUITY NO INTEREST IS GOOD
UNLESS IT MUST VEST IF AT ALL
WITHIN 21 YEARS AFTER SOME
SPECIFIC LIFE IN BEING AT THE
CREATION OF THE INTERESTS, AND
THAT MEANS THAT BASED ON THE
LOGIC OF THE INTERESTS, THE
LOGIC OF THE LANGUAGE
CONFERRING THE INTEREST, IT
MUST, IT HAS TO VEST WITHIN 21
YEARS AFTER THE DEATH OF SOME
SPECIFIED PERSON WHO IS ALIVE.
>> WHY DON'T YOU ONCE AGAIN SO
WE GO REAL LIFE, THIS IS NOT A
-- THIS IS A FIRST A RIGHT OF
FIRST REFUSAL, AND WE WILL GET
TO THAT BUT JUST GIVE, YOU
KNOW, IT'S ALL COMMON LAW.
IN WHAT LAW IS LAW OF
PERPETUITY NOT A GOOD THING.
>> THE RULE AGAINST PERPETUITY
IS DESIGNED TO PROTECT
INTERESTS --
>> HOW WOULD IT GO?
LET'S JUST SAY IN 1800, AND WAS
IS THE PERSON OWNS THE PERSON
OWNS A FARM.
WHAT DID THEY DO THAT WOULD
HAVE VIOLATED --
>> VIOLATE THE RULE.
>> -- AGAINST PERPETUITY.
>> THEY MIGHT SET UP EITHER A
COMMERCIAL INTEREST OR BEQUEST
TO SOMEBODY THAT WOULD VEST IN
THE GRANDCHILDREN'S CHILDREN OR
SOMETHING LIKE THAT SO IT GOES
PERHAPS HUNDREDS OF YEARS INTO
THE FUTURE.
>> THEY PUT THESE THINGS IN
TRUST FOREVER.
>> WELL, ISN'T THE MAIN PURPOSE
HERE OF HAVING SUCH A RULE TO
BE SURE WE DON'T HAVE SUCH
RESTRICTIONS.
ON THE ALIENATION OF PROPERTY
THAT WE DON'T HAVE A BUSY
MARKETPLACE OUT THERE AND
PROPERTY'S NOT FREE TO BE
CONVEYED.
WOULD YOU AGREE THAT'S AT LEAST
ONE?
>> THAT IS A SIGNIFICANT --
>> TELL US, IF YOU CAN, IF THAT
REALLY IS THE, THE PURPOSE
HERE.
HOW THE EFFECT OF THE DISTRICT
COURT'S RULING AT LEAST IN THIS
CASE, WHICH VALIDATES THE RIGHT
OF FIRST REFUSAL.
IS THAT RIGHT?
>> THE OPTION OR WHATEVER YOU
WANT TO DO IT -- DOLL.
>> THE FOURTH DCA HOW DOES THAT
VIOLATE THE SPIRIT OF THIS
REASON FOR HAVING THAT RULE?
THAT IS THAT THE -- THERE'S NO
RESTRICTION ON THE PROPERTY
OWNER SELLING THE PROPERTY,
THAT THE PROPERTY OWNER HAS.
THE ONLY THING IS THIS
CONTRACTUAL AGREEMENT THAT THE
ASSOCIATION'S GOING TO GET
FIRST SHOT.
IS THAT RIGHT?
>> CORRECT.
>> SO WHERE IS THERE ANY
RESTRICTION ON THE ALIENATION
OF THE PROPERTY IN THE FACTUAL
CIRCUMSTANCES THAT, THAT WE'RE
FACING HERE?
>> STARTING WITH THE PUBLIC
POLICY THAT YOUR HONOR HAS
STATED.
THAT IS ESSENTIALLY CORRECT AND
A REASON FOR THAT PUBLIC POLICY
IS TO PREVENT PROPERTY FROM
BEING UNABLE TO BE FULLY
UTILIZED FOR THE BENEFIT OF
SOCIETY AT LARGE AND FOR THE
CURRENT OWN SORE HOW THE
FOURTH'S DCA'S INTEREST,
IMPACTS UPON THAT THIS IS A
VERY GOOD CASE TO DEMONSTRATE
THAT AND THE REASON FOR THAT IS
THE PROPERTY AT ISSUE HERE IS
PARCEL 16.
IT SERVES AS THE ENTIRETY OF
THE PARKING AREA FOR A PROPERTY
RIGHT NEXT TO IT OR NEARBY,
WHICH IS CALLED THE NORTH
MARINA.
>> WAS THAT THERE AT THE TIME,
THE AGREEMENT WAS ENTERED INTO
TO?
>> I BELIEVE THE MARINA WAS
FORMED AT ABOUT THAT TIME.
>> SO AT THE TIME THEY ENTERED
INTO THE AGREEMENT THEY KNEW
THAT'S WHAT THIS PROPERTY WAS
BEING USED FOR YET THEY GAVE
THE CONDOMINIUMS THIS RIGHT OF
FIRST REFUSAL.
>> YES.
THAT'S CORRECT.
YEAH.
AND THAT'S, THAT'S AN
INTERESTING PART BECAUSE I
THINK IN ESSENCE THE RULE
AGAINST PERPETUITIES IS
DESIGNED TO SAVE PEOPLE FROM
THEMSELVES.
>> HAVEN'T WE IN AGUILAR V.
PHILLIPS REALLY THIS KIND OF
PROVISION THE RIGHT OF FIRST
REFUSAL OR OPTION TO PURCHASE
IS ANALYZED NOT UNDER REALLY A
RULE OF PERPETUITIES ANALYSIS
BUT ON RESTRAIN OF ALIENATION
AND WE DETERMINE WHETHER THAT'S
UNREASONABLE OR NOT AND IF IT'S
ALREADY ON A FIXED PRICE, WE
HELD IT'S AN UNREASONABLE
RESTRAINT BUT WHERE IT'S NOT AT
A FIXED PRICE, WHETHER THAT'S
REASONABLE OR NOT, THAT'S STILL
THE ANALYSIS THAT IS USED UNDER
FLORIDA LAW.
NOT WHETHER IT VIOLATES THE
RULE AGAINST PERPITUITIES.
>> RIGHT IN THE -- DECISION,
WHAT THIS COURT DECIDED IN 1980
WAS THE INTEREST IN ISSUE THERE
WAS BETTER CLASSIFIED,
CLASSIFIED IS YOUR WORD THAT
WAS USED AS AN UNLAWFUL
RESTRAINT ON ALIENATION AND THE
REASON IS BECAUSE IT WAS AN
OBVIOUS UNLAWFUL RESTRAINT.
IT HAD A FIXED PRICE AND
UNLIMITED DURATION, SO WHAT THIS
COURT SAID IN 1980 WAS WHILE
THIS INTEREST MIGHT BE SUBJECT
TO THE RULE AGAINST
PERPETUITIES, WE THINK IT'S
BETTER CLASSIFIED AS AN
UNLAWFUL RESTRAINT.
>> RIGHT AND WHY -- WHY ISN'T
THAT AN ANALYSIS SOUND IN THAT
REALLY GETTING BACK TO THE
WHOLE PURPOSE BEHIND THE RULE
AGAINST PERPETUITIES IT'S
REALLY DESIGNED TO PREVENT
PERPETUAL SUCCESSION OF
PROPERTY.
I DEED TO MY SON AND THEN TO
HIS SON AND THEN TO HIS SON
BACK THEN IN THE 1800S.
WHEREAS RIGHTS OF FIRST REFUSAL
AT LEAST IN THIS CONTEXT IS A
COMMERCIAL CONTRACT.
IT REALLY HAS VERY LITTLE TO DO
WITH THE PURPOSE BEHIND THE
RULE AGAINST PERPETUITIES.
>> WELL, I THINK WE'VE CITED
CASE LAW THAT THAT ACTUALLY
BEGS TO DIFFER WITH THE POLICY
PERSPECTIVE, YOUR HONOR.
IT DOESN'T MATTER WHETHER IT'S
COMMERCIAL OR PART OF A
TESTAMENTARY DISPOSITION.
THE POINT IS PROPERTY IS BEING
-- ALIENABILITY AND IT'S
MARKETABILITY ARE BEING
REFUSED.
>> WE ARE TALKING NOW ABOUT TWO
THINGS.
THE COMMON LAW, WHICH IS
NONSTATUTORY WHICH IS WITHIN
THE PREROGATIVE OF THE COURT TO
DETERMINE BASED ON HOW THIS WAS
OR SHOULD'VE BEEN INTERPRETED
AS COMMON LAW, AND POLICY,
PUBLIC POLICY.
MY QUESTION WITHOUT REGARDS TO
WHETHER THE STATUTE ITSELF
SHOULD BE RETROACTIVE IS -- AND
IT FOLLOWS UP WITH JUSTICE
LEWIS'S FIRST QUESTION IS SINCE
THE POLICY OF THIS STATE IS NOW
TO SAY THAT RIGHTS OF -- THE
RULE AGAINST PERPETUITIES IS
NOT, IS NO LONGER TO BE
ENFORCED.
AND SINCE THE POLICY IS THAT,
THAT THEREFORE THE POLICY IS NO
LONGER IN THIS STATE TO BE
CONCERNED ABOUT WHETHER A
RIGHT OF FIRST REFUSAL.
IT'S NOT ILLEGAL.
IT'S PERFECTLY PROPER.
WHY SHOULDN'T YOU THEN FOLLOW
THE, ON THE COMMON LAW THE
MINORITY VIEW OF SUCH COURTS,
YOU KNOW, THE MASSACHUSETTS
SUPREME COURT AND OTHERS THAT
HAVE SAID THAT FIRST OF ALL,
THIS IS REALLY MUCH MORE OF A
CONTRACTUAL INTEREST, NOT A
PROPERTY INTEREST, AND FOLLOW
THAT MORE NARROW RULING BECAUSE
OUR -- IT'S GOING TO BE
IRRELEVANT GOING FORWARD AND
THE PAST WE HAVE THE OPTION TO
LOOK AT IT AND, AND INTERPRET
IN THE MOST NARROW WAY
CONSISTENT WITH OUR OWN
PRECEDENT AS JUSTICE CANTERO'S
POINTED OUT.
SO WHY ISN'T THAT THE BETTER
THING FOR US TO DO RATHER THAN
IF THE POLICY ISN'T GOING TO BE
SOMETHING THAT'S GOING TO
AFFECT INTERESTS IN THE FUTURE?
>> IT IS, YOUR HONOR, CORRECT.
IT'S GOING TO AFFECT THE PAST
INTERESTS, THE OLDER INTERESTS,
NO DOUBT ABOUT THAT.
>> DO WE EVEN KNOW HOW MANY
INTERESTS THERE ARE OUT THERE?
I GUESS -- I MEAN, HOW MUCH OF
AN IMPACT THIS -- WHAT WE SAY
TODAY WILL HAVE ON PROPERTY
TRANSACTIONS?
>> BASED ON THE RESEARCH WE'VE
DONE OF CASES, THIS HAPPENS
PERIODICALLY BUT -- I DON'T
THINK THERE'S ANY EASY WAY FOR
TO KNOW --
>> WE DON'T SEE AN OUTCRY OF
AMICUS BRIEFS SAYING DON'T DO
THIS OR DO THIS OR ANYTHING OF
THAT NATURE.
>> RIGHT.
>> I THINK THAT'S BECAUSE
PEOPLE ARE AFRAID TO SHOW
WHATANE AND DON'T KNOW ABOUT
THE RULE AGAINST --
[LAUGHTER]
THAT'S JUST MY THEORY YOUR
HONOR IN 1977 WHEN THIS
AGREEMENT WAS ENTERED INTO THE
LAW WAS CLEAR IN INTO, -- IN
FLORIDA.
THE CASE WHICH WE CITE IN OUR
BRIEF WAS DECIDED IN NOVEMBER
1945.
FOURTH DISTRICT.
JUDGE BILL OWEN WROTE THAT
DECISION AND IN NO UNCERTAIN
TERMS THE RULE AGAINST
PERPETUITIES APPLIES TO RIGHTS
OF FIRST REFUSAL THE PARTIES
WHO ENTERED INTO THIS AGREEMENT
SHOULD NOT HAVE BEEN TAKEN BY
SURPRISE.
>> YOU MEAN THE LAWYER WHO
ADVISED THE OWNERS AND IN AN
ARM'S LENGTH TRANSACTION AS
THIS WAS WERE KNOWINGLY
ENTERING INTO AN ILLEGAL
TRANSACTION?
>> I PRUSUME THEY DIDN'T KNOW
BUT THEY SHOULD'VE -- THERE WAS
NO SURPRISE.
IF SOMEONE'S LOOKING AT THE
ISSUE OF FAIRNESS, FOR EXAMPLE,
COULD THEY HAVE KNOWN WHAT THE
LAW WAS?
IT WAS CLEAR WHAT THE LAW WAS,
ESPECIALLY IN THE FOURTH
DISTRICT.
THE U.S. SUPREME COURT HAS LONG
SINCE DECIDED THE -- CAN'T
SERVE AS A MEASURING LIFE IN
BEING.
>> ISN'T THERE A STRONGER -- IF
YOU ARE GOING TO BRING UP THE
ISSUE OF FAIRNESS, ISN'T THERE
A STRONGER PRINCIPLE OF
PAIRNESS THAT YOUR CLIENT OR
PREDECESSOR ENTERED INTO THIS
AGREEMENT?
>> RIGHT.
>> NO DOUBT.
ALL WE ARE TALKING ABOUT NOW IS
A PARTY'S ATTEMPTING TO ENTER
INTO A VOLUNTARY AGREEMENT.
THAT NOBODY'S CLAIMING THAT
THEY WERE COERCED AND/OR
WHATEVER AND YOU KNOW, SO IN
TERMS OF FAIRNESS, WE'RE JUST
TALKING ABOUT ENFORCING A A
PROMISE THAT WAS MADE AND THIS
CIRCLES BACK TO CASES THAT MADE
DISTINCTIONS.
BETWEEN CONTRACT RIGHTS AND
PROPERTY RIGHTS.
SO WHY SHOULDN'T WE TREAT THIS
AS SIMPLY A CONTRACT RIGHT?
>> BECAUSE IT CONFERS AN
EQUITABLE INTEREST IN REAL
PROPERTY.
WE'VE CITED A COUPLE OF REALLY
GOOD CASE ON THAT.
THE FURAREO CASE AND THE
STEWART KINGSTON CASE.
>> I AM STILL HAVING A PROBLEM
WITH YOU STARTED TO ANSWER MY
QUESTION.
OKAY?
AND THEN WE GOT OTHER QUESTIONS
AND SO.
>> RIGHT.
>> HOW, HOW DOES THIS AGREEMENT
VIOLATE UNDERLYING RATIONALE OR
REASONS FOR HAVING THE RULE
AGAINST PERPETUITIES?
DOESN'T KEEP PROPERTY IN LIMBO
INDEFINITELY IN THE FUTURE OF
FOREVER, DOES IT?
IT, YOU'RE --, THE, THE OWNER
OF THE PROPERTY IS FREE TO
CONVEY THE PROPERTY.
ALL THAT HAS TO HAPPEN IS THE
APPELLEE HERE GETS A SHOT AT
IT, AT WHATEVER THE PRICE AND
TERMS ARE.
SO HOW DOES THIS VIOLATE ANY
UNDERLYING REASON FOR HAVING
THAT RULE?
>> OKAY.
IT VIOLATES THE RULE BECAUSE IT
MAKES IS MORE DIFFICULT TO
MARKET OR TO TRANSFER BOTH
PROPERTIES.
THE NORTH MARINA AND THE
MARKING -- PARKING LOT.
IF THE INTEREST IN THE IN -- IN
HAVING A RULE AGAINST
PURPETUITIES IS TO PROTECT
PROPERTY FROM OWNERS SO TO
SPEAK.
>> I MEAN THOUSANDS OF PARCELS
OF PROPERTY ARE SOLD EVERY DAY
WHERE SOMEBODY HAS A RIGHT OR
FIRST -- RIGHT OF FIRST
REFUSAL.
I AM HAVING DIFFICULT -- THE
CONCEPT THAT MAKES IT DIFFICULT
TO SELL PROPERTY.
WOULDN'T YOU AGREE THAT
THOUSANDS OF PARCELS OF
PROPERTY ARE SOLD EVERY DAY?
WHERE THERE'S A PARTY THERE
THAT HAS ARIGHT OF FIRST
REFUSE.
>> I DON'T KNOW NUMBERS BUT
CERTAINLY PROPERTIES ARE SOLD
EVERY DAY WHERE THERE'S A RIGHT
OF FIRST REFUSE.
>> AND IT'S NOT REALLY AN
OBSTACLE TO THE MARKETING OF
THE PROPERTY.
>> IT THERE'S A RIGHT OF FIRST
REFUSAL A THIRD PARTY PURCHASER
HAS TO CONSIDER THAT AND KNOW
THAT FOR EXAMPLE IF THEY DO
SPEND A LOT OF TIME AND MONEY
DOING DUE DILIGENCE TO
DETERMINE WHAT THE ECONOMIC
PROSPECTS ARE FOR THIS PROPERTY
AND WHAT IT'S DONE IN THE PAST
AND WHAT THE CAPITAL NEEDS ARE
THEY MAY MAKE A BID AND IF IT'S
ACCEPTABLE TO THE OWNER THEY
MAY LOSE SIMPLY BECAUSE THE
HOLDING OF THE INTEREST HAS
EXHAUSTED ITS RIGHT.
SO IF THE THIRD PARTY PURCHASER
HAS A COUPLE OF PROSPECTS OUT
THERE WHY WASTE TIME AND MONEY
IN THIS?
>> SHOULDN'T THE ANALYSIS THEN
BE WHETHER IT'S AN UNREASONABLE
RESTRAINT ON ALIENATION?
YOU MAY HAVE A VERY GOOD POINT
ON ALL THOSE ISSUES BUT THAT
SEEMS TO ME POINTS MADE AS TO
WHETHER IT'S AN UNREASONABLE
RESTRAINT ON ALIENATION.
>> THE CASE IS TALKING ABOUT
THE RULE AGAINST PERPETUITIES.
DON'T FOCUS NECESSARILY ON
ALIENATION BECAUSE THE RULE WAS
DESIGNED TO BE SIMPLE ENOUGH TO
BE APPLIED.
I KNOW THAT SOUNDS FUNNY.
>> I THINK BECAUSE THE RULE
WASN'T DESIGNED FOR THESE KINDS
OF COMMERCIAL AGREEMENTS.
>> WELL, I -- THE RULE,
ACCORDING TO THE CASE LAW THAT
I THINK HAS A VERY GOOD
DISCUSSION OF IT, STEWART
KINGSTON AND THE FURARO CASE,
THE RULE WAS DESIGNED TO, TO
RESTRICT OR TO RESTRICT
INTERESTS REMOTELY REGARDLESS
OF WHERE THEY CAME FROM.
REGARDLESS OF THE -- THE ONLY
DIFFERENCE BETWEEN A COMMERCIAL
TRANSACTION AND A TESTAMENTARY
THE COMMERCIAL ONE
THEORETICALLY HAS CONSIDERATION
FOR IT.
>> I KNOW YOUR INTO YOUR
REBUTTAL BUT I WANT TO GIVE YOU
AN OPPORTUNITY TO ADDRESS A
THRESHOLD CONCERN THAT I HAVE,
AND THAT IS THE WHOLE ISSUE OF
WHETHER WE SHOULD TAKE THE
CASE.
I UNDERSTAND THAT THE FOURTH
DISTRICT CERTIFY ADCONFLICT,
BUT IT CERTIFY ADCONFLICT ON
THE ISSUE OF THE RETROACTIVITY
OF THE 2000 AMENDMENT THAT SAID
THERE IS NO RULE AGAINST
PERPETUITIES IN THE STATE OF
FLORIDA.
THE FALLS CHASE CASE WITH WHICH
IT CERTIFIED CONFLICT WAS CITED
IN -- DECIDED IN 1997 THREE
YEARS BEFORE THAT AMENDMENT WAS
ENACTED SO HOW COULD?
>> THE LANGUAGE OF FALLS CHASE
MAKES CLEAR NO PART OF THE
STATUTE CAN BE APPLIED
RETROACTIVELY BECAUSE IT
AFFECTS SUBSTANTIVE RIGHTS SO
ALTHOUGH THE 2000 AMENDMENT
HADN'T COME ALONG THE FALLS
CHASE SAID IT CAN'T BE APPLIED
RETROACTIVELY IT WAS A 1975
ACTION IN THAT CASE SO THERE IS
A DIRECT AND EXPRESS CONFLICT
IN THISICATES CASE.
I KNOW I HAVE FOUR MINUTES LEFT
IF I CAN RESERVE THOSE.
>> CERTAINLY.
>> THANK YOU VERY MUCH.
>> CERTAINLY.
>> GOOD MORNING.
MAY IT PLEASE THE COURTMENT MY
NAME IS DANIEL ROSEN BALM I AM
HERE WITH MY ASSOCIATE ON
BEHALF OF THE APPELLEE AND WITH
THE COURT'S PERMISSION I WOULD
LIKE TO ADDRESS AN UNDERLYING
MISCONCEPTION WITH WHAT HAS
BEEN TERMED THE MAJORITY VIEW
ABOUT WHETHER A CONTRACT
INTEREST OR A REAL PROPERTY
INTEREST IS AT ISSUE BETWEEN
THE, BEFORE THE COURT.
BECAUSE THIS COURT IF THE CASE
IS ACCEPTED JURISDICTIONALLY
HAS TO COME DOWN ON ONE SIDE OR
THE OTHER WITH RESPECT TO THAT
QUESTION, AND I DON'T BELIEVE
AFTER HEARING THIS ANALYSIS YOU
WILL HAVE TO REACH THE ISSUE OF
WHETHER THE STATUTE IS
RETROACTIVE OR NOT, ALTHOUGH I
BELIEVE THAT ISSUE IS RESOLVED
IN FAVORABLY RETROACTIVITY.
ALSO IN DOING THIS I WOULD LIKE
TO ANSWER JUSTICE LEWIS'S
QUESTION WHEN I GIVE YOU THIS
ANALYSIS.
AS INITIAL MATTER, A PURE RIGHT
OF FIRST REFUSAL SUCH AS WE
HAVE IN THIS CASE FOSTERS
ECONOMIC DEVELOPMENT.
THE REASON FOR THAT IS BECAUSE
IT GIVES YOU TWO BUYERS INSTEAD
OF ONE AND IF YOU ARE A
SELLINGER OF PROPERTY YOU CAN
HAVE A CONTRACT WITH SOMEONE IN
MANY THINGS CAN GO WRONG AND
THE SALE CAN FALL THROUGH.
SO BUYING HAVE -- SO BY HAVING
A BACKUP BUYER --
>> THIS WOULDN'T BE A BACKUP
BUYER.
IT WOULD BE A FRONTLINE BUYER.
>> WELL THE REAL ESTATE
CONTRACT WITH THE PURCHASER
THAT, THAT, THAT IS.
>> CAN YOU EXPLAIN IN PRACTICE
HOW IT WORKED?
DOES THE OWNER HAVE TO TELL
THE, THE POSSESSOR OF THE RIGHT
OF FIRST REFUSAL WE INTEND TO
SELL THIS PROPERTY AT X PRICE
BEFORE WE PUT IT ON THE MARKET,
WILL YOU BUY IT AT THIS PRICE?
OR DID THEY PUT IT ON THE
MARKET AND TELL THEM FIRST --
HOW DOES THAT WORK?
>> IT CAN WORK IN EITHER WAY.
THE ONLY REQUIREMENT HERE IS
THAT THERE IS A CONTRACT RIGHT
THAT MY CLIENT HAS TO BE
NOTIFIED ABOUT -- WITHIN 30
DAYS OF A PROPOSED SALE.
WHETHER THAT SAIL IS IN THE
CONTRACT FORM OR DISCUSSION
FORM BUT IN THE TERMS OF THAT
SALE, AND, AND MY CLIENT WOULD
THEN HAVE THE ABILITY TO
DETERMINE WHETHER THEY WOULD
ACCEPT THOSE TERMS.
AND THAT'S WHY I SAY WHAT YOU
REALLY GETTING HERE IS, IS THE
BENEFIT IF WE WANT TO GO BACK
TO THE RULE AGAINST
PERPETUITIES WHICH I WOULD
ARGUE THAT HAS VERY LIMITED
VALUE TODAY.
IN FACT OUR LEGISLATURE MADE A
POLICY DECISION THAT IT HAS
VERY LIMITED VALUE AND NO VAL
SUE WITH RESPECT TO COMMERCIAL
TRANSACTIONS BUT THE BIG
MISCONCEPTION I THINK THAT'S
GOING ON HERE IS THE STATES
THAT HAVE TAKEN THE SO-CALLED
MAJORITY VIEW AND HAVE SAID ITS
A REAL PROPERTY INTEREST HAVE
DONE SO MISTAKENLY, AND THAT'S
BECAUSE THEY BASE THEIR
ANALYSIS ON THE EXISTENCE OF
THE REMEDY OF SPECIFIC
PERFORMANCE.
NOW CONTRACT LAW GIVES SPECIFIC
PERFORMANCE IN MANY INSTANCES.
FOR EXAMPLE, AS A REMEDY TO
SOMEONE WHO BREACHES A
NONCOMPETE AGREEMENT.
YOU CAN GET SPECIFIC
PERFORMANCE.
AS A REMEDY TO SOMEONE WHO
LIVES IN AN ASSOCIATION AND
DOESN'T MAINTAIN THEIR HOME YOU
CAN GET SPECIFIC PERFORMANCE SO
THE MISTAKE IN THOSE LINES OF
CASES COMES FROM THE FACT THAT
THEY ARE TAKING THE REMEDY OF
SPECIFIC PERFORMANCE AND
MISTAKING THAT WITH REMOTE
VESTING.
>> CAN I JUST ASK A QUESTION ON
THE FACTS OF THIS CASE?
AND IT PROBABLY BECAUSE IT'S AN
ISSUE OF WHETHER IT'S RESTRAINT
ON ALIENATION ISN'T AT ISSUE
AND IF WE DECIDE THAT A RIGHT
OF FIRST REFUSAL IS A CONTRACT
RIGHT THAT VESTED AT THE TIME
OF THE CONTRACT, HELP, THE
PROPERTY INTEREST OR THE,
WHETHER THE RULE APPLIES IS, IS
ANALYSIS DOESN'T NEED TO BE
MADE BUT I AM INTERESTED JUST
IN THIS CASE BECAUSE MR.^AIELLO
REFERRED TO.
APPARENTLY THERE MAY HAVE BEEN
A BAD DEAL MADE AT THE TIME
BECAUSE THEY -- IF THERE WAS A
MARINA THERE AND A PARKING LOT,
SOMEBODY WHO'S GOING TO -- I'M
ASSUMING IS GOING TO PURCHASE
THE MARINA IS GOING TO ALSO
WANT TO HAVE THE PACKAGE OF A
PARKING LOT BECAUSE A MARINA AT
A PARKING LOT DOESN'T DO -- YOU
KNOW, ISN'T VERY GOOD SO WHAT
THEY WOULD HAVE IS A PACKAGE OF
SAYING HERE, SOMEONE'S WILLING
TO BUY THE WHOLE PROPERTY THAT
IS THE MARINA AND THE PARKING
LOT FOR THIS AMOUNT OF MONEY.
NOW ALL THE SUDDEN THEY
ACTUALLY HAVE TO BACK OUT AND
SAY, ASK THE CONDOMINIUM
ASSOCIATION WOULD YOU WANT TO
BUY THE PARKING LOT AND THERE'S
NO SEPARATE PRICE SO ISN'T --
IN TERMS OF THIS CASE, ISN'T
THAT THE REAL UNDERLYING
PROBLEM IS THAT SOMEBODY
SHOULD'VE EVEN GIVEN THE
ASSOCIATION THE RIGHT OF FIRST
REFUSAL FOR BOTH PARCELS SORE
THERE WOULD BE A PACKAGE OF THE
MARINA AND THE PARKING LOT AND
JUST SO WE KNOW REAL WORLD
STUFF, BECAUSE OTHERWISE WE ARE
TALKING ABOUT WHO'S GOING TO
BUY A PARKING LOT, SEPARATE
FROM THE MARINA.
IS THAT UNDERLYING THE, WHAT'S
THE SUBTEXT HERE.
>> THE RECORD REFLECTS THAT THE
PARKING LOT IS A GRASSED AREA
WHICH HAS CONCRETE ON IT, AND
IS BETWEEN INTERCOASTAL
WATERWAY AND THE CONDOMINIUM
BUILDING AT ISSUE SO THE
CONCERN WAS THAT AS THE MARINA
EXPANDS, IF IT DOES, THAT A
PARKING GARAGE WOULD BE BUILT
THERE AND THE PARKING GARAGE
WOULD HAVE A SUBSTANTIAL IMPACT
ON NOT ONLY THE ABILITY AND THE
VALUE OF THE CONDOMINIUM
UNITOOTS SEE THE WATER AND TO
HAVE ENHANCED PROPERTY VALUE
BUT MORE IMPORTANCELY --
IMPORTANTLY, THE EXISTENCE OF A
PARKING GARAGE WOULD INCREASE
THE TRAFFIC FLOW AND THE
UTILITY OF THE AREA AND THEREBY
CAUSE MUCH MORE COMMERCIAL
TRAFFIC IN A RESIDENTIAL AREA.
>> I'M NOT ASKISH --
>> RESPONDING TO HER QUESTION.
THAT'S THE IMPACT ON YOUR
PROPERTY AND SHE'S ASKING FROM
THE IMPACT ON HOW IT IMPACTS
MARKETABILITY.
>> RIGHT.
>> SO THAT, THAT COULD YOU
RESPOND.
>> YES, I SURE WILL.
AS TO MARKETABILITY, THE MARINA
GAVE THE RIGHT OF FIRST REFUSAL
ON THAT PARKING LOT.
AT THE SAME TIME, THE MARINA
WAS --
>> I AM NOT TALKING ABOUT
WHETHER IT IS FAIR OR NOT BUT
WE ARE TALKING IN ANSWER TO
JUSTICE ANSTEAD'S QUESTION.
THIS IS A GOOD DEAL.
I HAVE A HOUSE.
SOMEBODY IS GIVING ME TWO
BUYERS.
WHAT I JUST -- IT OCCURRED TO
ME IN THE CONTEXT OF THIS CASE
IT REALLY DOESN'T GIVE YOU TWO
BUYERS BECAUSE WHO'S GOING TO
WANT TO BUY A PARKING LOT
WITHOUT BUYING THE MARINE --
MARINA -- IT'S GOING TO DEPRESS
THE VALUE AND AGAIN THAT MAY BE
OR CONSIDERATION AND MAYBE IT'S
NOT IN THE RECORD BUT AS A
PRACTICAL MATTER, ISN'T THAT
THE REASON THAT THE, THE
SUCCESSORS TO THE OLD PORT COVE
DEVELOPER IS POS ABOUT THIS
DEAL?
>> WELL, JUSTICE PARIENTE, THE
REASON FOR THAT --
>> AND PO'D IS NOT A TERM OF
LEGAL ORIGIN.
>> UWHAT THEY ARE DOING IS
BUNDLING PARCELS.
IN OTHER WORDS, WE CAN ALWAYS
SAY THE MARINA CAN ONLY BE SOLD
WITH THE NORTH MARINA AND THEN
HAVE THE SAME ARGUMENT BEING
MADE HERE.
THERE'S A CASE RIGHT ON POINT
ONE OF THE OUT OF STATE
JURISDICTIONAL CASES HAS THAT
SPECIFIC ARGUMENT, AND THEY
SAID YOU CAN'T, YOU CAN'T
AGGREGATE PROPERTY.
IN ORDER TO MAKE THE ARGUMENT
THAT IS SOMEHOW THE RULE
AGAINST PERPETUITY SHOULD BE
IMPLEMENTED WITH A PURE RIGHT
OF FIRST REFUSAL BECAUSE THAT'S
NOT WHAT THE RIGHT OF FIRST
REFUSAL WAS GIVEN ON.
IT'S THE PARCEL SO THE MARINA
COULD SELL THE PROPERTY.
THEY COULD ALLOCATE A
REASONABLE PRICE TO THE, THE
MARINA AND ALLOCATE FAIR PRICE
TO OTHER PARCELS.
AND WITH RESPECT TO SELLING
THAT PARCEL, THEY WOULD EITHER
HAVE A RIGHT OF FIRST REFUSAL
OR WE WOULD BUY --
>> I THINK AS I UNDERSTAND --
>> I'M SORRY.
I JUST WANT TO UNDERSTAND -- IF
THE CONDOMINIUM THEN DECIDED TO
ELIMINATE THE PARKING BECAUSE
THEY WANTED TO MAKE A
PLAYGROUND OR WHATEVER IT --
OR, YOU KNOW, SOMETHING.
THEN SO THERE'S A RISK AGAIN,
AND I DON'T KNOW BECAUSE NO ONE
MADE THE ARGUMENT.
ALTERNATIVELY THIS WAS AN
UNREASONABLE RESTRAIN ON
ALIENITATION OR IT WASN'T A
FAIR CONTRACT OR THE CONTRACT
WAS ILLEGAL BUT I APPRECIATE
YOU ARE GOING TO -- I JUST --
BUT THAT'S THE REALITY IS IT
CERTAINLY HAS, CAN HAVE ADVERSE
EFFECTS OR IN THIS CASE FOR THE
OWNER.
>> WELL, THERE ARE -- THERE'S
ALSO A NORTH MARINEA THAT THE
OWNER OWNS AND THERE'S NOTHING
TO STOP THEM FROM HAVING
OFF-SITE PARKING WITH A VALET
OR HAVING PARKING ON THE
NORTH MARINA PARKING UP THERE.
>> WHAT CONSIDERATION SHOULD WE
GIVE THAT IF THE TURNS OUT FOR
ONE PARTY OR THE OTHER IT TURNS
OUT TO BE A VERY BAD DEAL IS
THAT A PROPER FACTOR?
>> YOU -- JUSTICE ANSTEAD, I
DON'T BELIEVE IT IS BUT HOWEVER
COURTS DON'T INDULGE IN
DETERMINING WHETHER ONE PARTY
OR THE OTHER PARTY MADE A GOOD
DEAL.
IT'S NOT HISTORICALLY THE ROLE
OF COURTS.
COURTS LOOK AT WHETHER OR NOT
THE, THE IN THIS PARTICULAR
CASE IT'S BEEN UNREASONABLE RE
STRAINT ON ALIENATION OR
SOMETHING THAT IMPEDES THE
ALIENATION OR THE ABILITY TO
CONVEY TITLE AT SOME REASONABLE
TIME.
>> LET ME ASK YOU TO ADDRESS --
WE STILL HAVEN'T GOTTEN REALLY
TO THE CERTIFIED CONFLICT IF
THERE IS ONE, AND THAT IS, IF
THE RULE OF PERPETUITIES DOES
APPLY TO THIS TRANSACTION, CAN
THE STATUTE APPLY RETROACTIVELY
TO ABROGATE THE RULE UNDER THIS
CONTRACT?
>> I BELIEVE IT CAN THE CASE
LAW VERY SPORTF OF OUR OPINION
INCLUDING THE FOURTH DISTRICT'S
OPINION POINTS OUT CORRECTLY
THAT THERE WAS NO VESTING OF A
SUBSTANTIVE RIGHT THAT'S BEING
IMPER SAID.
WHAT YOU HAVE HERE IS A STATUTE
THAT -- IN OTHER WORDS, THERE'S
NO RIGHT TO -- THE ONLY RIGHT
THAT WE COULD HAVE WOULD BE THE
RIGHT TO DECEIVE IN A DEAL.
>> IT WOULD BE A RIGHT TO
ALIENATE THE PROPERTY FREELY
WITHOUT ANY RIGHT OF FIRST
REFUSE.
>> BUT IF IT'S A CONTRACT
RIGHT, THEN THERE IS NO
IMPAIRMENT.
>> WELL, --
>> THAT'S WHAT IT REALLY HINGES
ON, I MEAN, AND, AND IN ANSWER
TO THE QUESTION ON CONFLICT, I
WOULD ASSUME THAT YOUR POSITION
-- YOUR POSITION IS THAT IF, IF
WE APPLIES THE FIRST DISTRICT'S
REASONING, YOU'D LOSE, WOULD
YOU NOT?
>> I BELIEVE WE WOULD.
-- I BELIEVE WE WOULD.
THEY ALSO CERTIFIED THE
REFORMATION --
>> THEY ALSO -- THEY FIND THAT,
THAT IT, THE RULE AGAINST
PERPETUITIES DOES APPLY TO A
RIGHT OF FIRST REFUSAL.
>> RIGHT.
>> CORRECT?
AND THEY ALSO APPLIED FIND THAT
THIS TO BE A SUBSTANTIVE RULE
THAT IS ABROGATED BY THE
STATUTE.
>> THAT'S CORRECT HOWEVER I
THINK THEY OVERLOOKED THE
SUPREME COURT CASE -- WHERE IT
SAYS IT SEEMS CLEAR TO US THAT
UNTIL AN OPTIONY EXERCISE AS
RIGHT IN ACCORDANCE WITH THE
TERMS OF HIS OPTION HAS NO
ESTATE EITHER LEGAL OR
EQUITIABLE IN THE LANDS INVOLVE
SODE I DON'T THINK THAT THE,
YOU KNOW, GETTING BACK TO THE
DICHOTOMY OF CONTRACT AND REAL
PROPERTY INTEREST AS WE GET --
GO DOWN THE LINIVE, WE HAVE A
SCALE.
IT'S GOING FROM BEING AS WE GO
DOWN THE LINE WE HAVE A SCALE
IT'S FROM A CONTRACT VENDEE ALL
THE WAY DOWN TO FIRST RIGHT OF
REFUSEAL AND IF THERE'S NO
VESTED RIGHT BECAUSE ALL WE
HAVE TO CONTRACT WHICH
IMPLICATES THE ABILITY TO BE
NOTICED, AND AT THE TIME OF
NOTICE WE WOULD THEN ENTER INTO
A CONTRACT.
AND IT'S THAT CONTRACT THAT
GIVES FORTH THE EQUITABLE
OWNERSHIP RIGHTS.
>> WELL ON THE PRELIMINARY
ISSUE OF WHETHER THERE IS
ACTUALLY CONFLICT OR NOT, IS
THERE ANYWAY THAT THIS FIRST
DISTRICT CASE CAN REALLY OUT
THERE -- LIVE OUT THERE WITH
THE FIRST DISTRICT'S RULE
WITHOUT THERE BEING A DISPARITY
BETWEEN THE APPLICATION IN THE
FIRST DISTRICT AND THE
APPLICATION IN THE FOURTH
DISTRICT?
>> THE ONLY WAY IT COULD WOULD
BE ON THE ISSUE OF THE 2000
AMENDMENT TO THE STATUTE.
BECAUSE THE 2000 AMENDMENT TO
THE STATUTE CLARIFIED, FIRST OF
ALL, THEY INCREASED AND, AND
CLARIFIED THE LANGUAGE WITH
RESPECT TO THE EXCEPTION TO THE
APPLICATION STATUTE TO
NONCOMMERCIAL TRANSACTIONS.
THE SECOND THING THAT IT DID
WAS IT POINTED OUT THAT IT
ABOLISHED WITH NO UNCERTAIN
TERMS ANY VESTIGE OF ANY
CONCEIVABLE COMMON LAW RULE
AGAINST PERPETUITIES SO IF YOU
DECLINE JURISDICTION, THE CASE
LAW WOULD STILL MAKE SENSE
BECAUSE YOU WOULDIVAL FALLS
CHASE, THAT FELL BEFORE THE
2000 STATUTE AND THEN YOU WOULD
HAVE OLD FORT COVE.
THE PROBLEM THAT WE HAVE, AND
THE ONE THAT I THINK IF YOU
WANT TO ADDRESS THE ISSUE WOULD
CLARIFY FLORIDA CASE LAW FOR
EVERYTHING WHO -- EVERYBODY WHO
NEEDS TO REVIEW THAT WOULD BE
THAT YOU HAVE THESE TWO CASES,
BOTH OF WHICH ARE, ARE
CERTIFIED.
ONE IS GREAT PUBLIC IMPORTANCE
TO THE SUPREME COURT, AND
ONE IS CONFLICT SO IF YOU
ADDRESS THE CASE YOU COULD AT
LEAST CLEAR UP THAT POINT.
SO THE CASE LAW ISN'T LEFT IN
THAT LIMBO.
WITH RESPECT TO JURISDICTION AS
WE REFERRED TO IN
JURISDICTIONAL BRIEF WE DON'T
THINK THIS IS A CASE WHERE YOU
HAVE TO HAVE JURISDICTION BUT
IT MAY BE HELPFUL BASED UPON
THE DIALOGUE.
>> CAN I GO BACK TO -- YOU WERE
TALKING ABOUT WHETHER IT'S A
VESTED RIGHT OR NOT AND THAT'S
THE SECOND PRONG OF THE
RETROACTIVITY ANALYSIS.
YOU FIRST HAVE TO GET TO
WHETHER THE LEGISLATURE
INTENDED TO RETROACTIVELY
ABOLISH THE RULE AGAINST
PERPETUITIES AND OF COURSE YOU
ARE FAMILIAR WITH THE OUR CASE
LAW PRESUME THE LEGISLATURE
INTENDED SOMETHING TO BE
PROSPECTIVE AND I AM LOOKING AT
THIS LEGISLATION AND I DON'T
SEE ANY HINT THAT IT IS WAS
INTENDED TO RETROACTIVELY
ABOLISH THE COMMON LAW RULE OR
IT WOULD'VE SO STATED.
>> WELL I THINK THE LANGUAGE
THE, THE 2000 AMENDMENT WHICH I
BELIEVE MAY HAVE MAY HAVE BEEN
PROMULGATED TO AFFECT THE FALLS
CHASE CASE, THE COMMON LAW RULE
AGAINST PERPETUITIES IS
ABOLISHED.
FALLS CHASE ROSE ON THE COMMON
LAW RULE AGAINST PERPETUITIES
SO THE STATUTE IS, THROUGH THE
LEGISLATIVE ENACTMENT IS SAYING
THAT WHAT FALLS CHASE RESTS ON
NO LONGER EXISTS.
SO IF NO LONGER EXISTS, THEN IT
CAN'T BE APPLIED.
>> THE PROBLEM IS THERE AN
INTEREST, HOWEVER YOU
CHARACTERIZE THAT INTEREST,
SUFFICIENT TO PROHIBIT THAT
FROM OCCURRING THAT YOU ARE
THEN TAKING SOMEONE'S INTEREST,
SOMEONE'S PROPERTY INTERESTS,
SOMEONE'S PROPERTY RIGHT?
VIA STATUTE ISN'T THAT WHAT
THAT COMES DOWN TO THEN?
SO IT SEEMS TO ME THAT WE ARE
-- REALLY THESE TWO QUESTIONS
ARE VERY CLOSELY CONNECTED.
THE FIRST QUESTION AS TO
WHETHER YOU HAVE AN INTEREST.
AND THAT TO DETERMINE WHETHER
RULE AGAINST PERPETUITIES IS
GOING TO APPLY.
SECOND IF YOU ANSWER THAT YES
THEN WE HAVE A PROBLEM
OVERCOMING BECAUSE YOU HAVE
ALREADY ABKNOWLEDGED THERE IS A
SUBSTANTIVE INTEREST.
>> THE SUBSTANTIVE INTEREST --
I THINK THIS IS THE FACTOR, THE
SUBSTANTIVE INTEREST IS A
PROPERTY INTEREST NOT A REAL
CONTRACT INTEREST.
>> I UNDERSTAND THAT BUT IF YOU
GET TO THE FIRST PART OF THE
QUESTION THEN YOU DON'T GET TO
THE SECOND PART IT IS PURE
CONTRACTUAL INTEREST.
WHAT I AM SAYING IS FIRST
QUESTION REALLY DECIDES THE
SECOND.
I MEAN DON'T YOU THINK.
I MEAN REALLY WHEN YOU GET DOWN
TO THIS.
>> I REALSY DO AND THAT'S WHY
IN MY PRESENTATION I PUT MORE
EMPHASIS ON THIS CONTRACT REAL
PROPERTY DICHOTOMY BECAUSE
THAT'S HOUSE THE CASES IN THE
VARIOUS JURISDICTION OF THE
UNITED STATES FALL DOWN, AND
EVEN THE FEDERAL COURTS, THEY
ALL START OUT TALKING ABOUT
WHETHER IT'S A CONTRACT
INTEREST OR WHETHER IT'S A REAL
PROPERTY INTEREST.
THE REASON IT IS CONTRACT
INTEREST AS PARTICULAR TO THIS
TYPE OF INTEREST IS THE
VESTING.
THE VESTING IS, IMMEDIATELY AT
THE TIME OF CONTRACT.
THE CASES THAT GO THE OTHER WAY
AND SAY IT'S A PROPERTY
INTEREST CLAIM THAT THE VESTING
IS BECAUSE YOU GET SPECIFIC
PERFORMANCE.
BUT YOU CAN'T GET TO THE
SPECIFIC PERFORMANCE PART UNTIL
YOU HAVE THE CONTRACT RIGHT.
>> WELL, LET ME -- YOU SAID
THAT THE VESTING OCCURRED UNDER
YOUR VIEW WHEN?
AT THE TIME OF CONTRACTING IS
WHAT YOU SAID S THAT WHAT YOU
ARE SAYING?
>> RIGHT.
RIGHT.
BECAUSE A PURE RIGHT OF FIRST
REFUSINGAL, -- REFUSAL, ALL THE
ISSUES THAT ARE DISCUSSED,
PARDON ME, ALL THE REASONS THAT
ARE DISCUSSED FOR THE PROPERTY
INTEREST ARE BASED UPON THE
REMEDY OF SPECIFIC PERFORMANCE.
FALLS CHASE ITSELF SAYS THAT
AND THE LANGUAGE THAT IT USES
--
>> I AM TRYING TO CLARIFY WHAT
YOUR ARGUMENT IS FOR MY MIND.
I'M SORRY IF I'M NOT GETTING IT
BUT YOU ARE SAYING THAT THE
CONTRACTUAL RIGHT OF FIRST
REFUSAL VESTS AT THE TIME OF
CONTRACTING?
>> YES.
>> AND THAT VESTING IS A
PROPERTY INTEREST.
>> NO AND VESTING IS NOT A
PROPERTY INTEREST.
>> 0 OKAY.
>> VESTING IS NOT A PROPERTY
INTEREST.
>> SO THAT IS THE PROBLEM WITH
THE USE OF THE WORD VESTING
BECAUSE IT IS TYPICALLY USED
WITH A REAL PROPERTY INTEREST.
>> WELL, THAT'S CORRECT BECAUSE
A CONTRACT INTEREST ISN'T, IS
NOT SOMETHING THAT'S VESTED.
IT'S SOMETHING THAT OCCURRED.
BUT WHAT HAPPENS IS AND I THINK
THIS IS WHERE THE ERROR IS IN
THOSE CASES WHAT HAPPENS IS
WHEN YOU HAVE THE BREACH OF
FIRST INTEREST WHERE YOU HAVE
PURE RIGHT OF FIRST REFUSAL
WHEN THE PARTY HOLDING THE, THE
RIGHT OF FIRST REFUSAL WANTS TO
EXERCISE BUT IS DENIED HIS
RIGHT OR HER RIGHT WHAT HAPPENS
IS YOU ACTUALLY HAVE THE LAST
ELEMENT OF THE CAUSE OF ACTION
THAT OCCURS WHICH IS THE DAMAGE
AND THAT'S, THAT'S WHETHER THEY
MAKE THE MISTAKE THEY ARE
CONFUSING THE REMEDY WITH THE
CREATION OF THE LAST ELEMENT OF
THE CAUSE OF ACTION.
YOU ARE THEN DAMAGED.
>> COULD YOU GO BACK TO THE
WHOLE ISSUE OF WHETHER OR NOT
689.2257 REALLY IS ROT
RETROACIVELY ABROGATING THE
COMMON LAW RIGHT OF RULE
AGAINST PERPETUITY?
>> BECAUSE AS I UNDERSTAND YOUR
ARGUMENT YOU SAID THAT THE
LANGUAGE ITSELF DOES THAT AND
WHAT SPECIFICALLY IN THAT
STATUTE,
LANGUAGE IN THAT STATUTE ARE
YOU REFERRING IT.
>> THE FOURTH DISTRICT --.
>> AND PARTICULARLY WOULD YOU
ADDRESS WHAT THE, THE PHRASE
REGARDLESS OF WHAT IS GOVERNED
BY THIS SECTION ADDS TO THAT.
>> WELL AND I THINK THE
LANGUAGE I HAVE TO GO TO THE
OLD PORT COVE DECISION ITSELF
BUT I BELIEVE THAT THE, THE
COURT ACTUALLY CITED TO THE
LANGUAGE ON PAGE 3 --
>> THE SOLE -- THE SECTION IS
THE SOLE EXPRESSION OF ANY RULE
AGAINST PERPETUITIES OR --
SESTING IN THIS STATE.
NO COMMON LAW RULE AGAINST
PERPETUITIES OR REMOTENESS IS
INVESTING SHOW EXISTWISE
RESPECT TO ANY PRIOR INTERESTS
OR POWER REGARDLESS OF WHETHER
SUCH INTEREST OR POWER IS
GOVERNED BY THIS SECTION.
>> THE LANGUAGE THAT -- I'M
SORRY, JUSTICE QUINCE.
THE LANGUAGE DECIDED UPON BY
THE FORTY DISTRICT COURT THAT I
AGREE WITH IS 62299 C IF A
NONVESTED INTEREST OR POWER WAS
CREATED PRIOR TO AND ON OR
AFTER OCTOBER 1, 1998, TO
VIOLATE THIS STATE'S RULE
AGAINST PERPETUITIES IS THAT
RULE EXISTED BEFORE OCTOBER 1,
1988, UPON THE PETITION OF
INTEREST MAY REFORM THE
DISPOSITION.
AND THEN IT GOES ON WITHIN
LIMITS OF PERPETUITY SO THE
STATUTE IS INTENDED TO GO -- AS
JUDGE SAID GO BACK BABBLING
BACKWARD AND FORWARD.
>> BUT IF THE RULE AGAINST
PERTEETY IS APPLICABLE TO THIS
TYPE OF INTEREST THEN THE RULE
-- IF THAT RULE IS APPLICABLE
HERE, THEN BECAUSE THEY
VIOLATION WHAT CAN YOU REFORM?
WHAT IF THE VIOLATES THE RULE
AGAINST PERPETUITIES WHAT COULD
YOU REFORM?
WHAT COULD YOU DO ABOUT THIS
AGREEMENT THAT WOULD BE IN
KEEPING WITH THE INTENT OF THE
PARTYS WHO ENTERED INTO IT.
>> THE REFORMATION WOULD BE IN
ESSENCE A CAP ON THE DURATION
OF THE INTEREST, AND WHAT WE
HAD SUGGESTED IN THE TRIAL
COURT --
>> WOULD THAT BE IN KEEPING
WITH THE INTENT OF THE PARTIES
THAT ENTERED INTO THE CONTRACT?
BECAUSE IT SEEMS VERY CLEAR TO
ME THIS INTEREST WOULD LACK --
>> I MEAN I I AGREE WITH YOUR
HONOR.
IT'S ALMOST TO A CERTAIN DEGREE
A FICTION BUT, BUT WHAT THE
LEGISLATURE I BELIEVE IS SAYING
HERE IS THAT IF YOU CAN'T HAVE
WHAT YOU HAVE, YOU CAN HAVE THE
NEXT BEST THING.
EVEN THOUGH IT MAY NOT BE
PERFECT.
AND IT'S ALMOST LIKE A
RESCISSION.
LIKE BRAYMAN DODGE CASE IF YOU
CAN'T GET PARTIES EXACTLY BACK
TO THE STATUS QUO WE WILL GET
AS CLOSE AS WE CAN AND I
BELIEVE THAT'S WHAT THE
SUBSECTION OF THE 2000
LEGISLATION IS SAYING.
>> WITH YOUR HELP, YOU HAVE
USED YOUR TIME.
BUT I WOULD LIKE YOU TO TAKE
ONE MINUTE TO TELL US WHY THIS
COURT SHOULD ADOPT YOUR
POSITION THAT THIS IS A
CONTRACTUAL RIGHT AND WITH
REGARD TO HOW IT WOULD OPERATE
AND IMPACT ON FLORIDA?
>>> THE REASON THE COURT SHOULD
ADOPT THE CONTRACTUAL POSITION
IS BECAUSE NUMBER ONE, I
BELIEVE IN REAL PROPERTY AND
CONTRACT LAW ANALYSIS, IT IS
CONTRACTUAL IN NATURE AND I
THINK THAT IS THE CORRECT LEGAL
ANALYSIS.
NUMBER TWO IS WITH RESPECT TO
IMPACT ON THE STATE A. RIGHT OF
FIRST REFUSAL PURE AS IT IS IN
THIS CASE HAS ABSOLUTELY NO
NEGATIVE EFFECT WHATSOEVER ON A
PERSON WHO ENTERED INTO AN
AGREEMENT TO GIVE IT BECAUSE
ALL IT DOES IS GIVE SOMEONE
WHO'S IN THE POSITION OF MY
CLIENT AN OPPORTUNITY TO BUY
THE PROPERTY ON THE SAME TERMS
AND CONDITIONS THAT IS BEING
OFFERED TO THE OTHER PARTY, AND
THERE IS ABSOLUTELY NOTHING IN
IMPEDING THE POLICY REASONS OF
THE RULE AGAINST PERPETUITIES
BY REMOTE VESTING.
THERE IS NO REMOTE VESTING.
THAT'S WHAT THE RULE OF PURP
TEWDIES IS DESIGNED TODRIES.
THANK YOU -- PERPETUITIES IS
DESIGNED TO ADDRESS.
THANK YOU VERY MUCH.
>> I WOULD LIKE TO ADDRESS A
FEW ISSUES AS QUICKLY AS I CAN
THERE'S NOT A LOT OF TIME.
>> I WOULD LIKE TO ASK A
QUESTION THAT I DON'T KNOW THAT
I SAW IN THE BRIEFS MAYBE I
MISSED IT.
AT COMMON LAW, WERE THERE SUCH
THINGS AS RIGHTS OF FIRST
REFUSE.
>> OKAY -- YES, YOUR HONOR.
>> OKAY SO ARE THERE ANCIENT
ENGLISH CASES THAT APPLIED THE
RULE AGAINST PERPETUITIES TO
RIGHTS AGAINST FIRST REFUSE.
>> NOT BEFORE 1776.
THERE ARE A COUPLE OF CASES AND
I DON'T REMEMBER PERSONALLY.
>> THAT'S ANCIENT TO US.
>> OKAY.
>> ALL OF US.
WE CAN AGREE ON THAT BUT THERE
ARE A FEW CASES FROM THE 1880S
AXACTUALLY CITED BY THE
ASSOCIATION IN THEIR BRIEF THAT
TALK ABOUT THE ISSUE BUT AS,
THEY HAVERAPHER CITED THEM TO
POINT OUT THAT THERE ARE NO
ENGLISH COMMON LAW CASES
THATDRIES THIS ISSUE.
THE ENGLISH COMMON LAW ADDRESS
THE ISSUE AGAINST COMMON LAW
PERPETUITIES --
>> SO HOW DO WE KNOW THERE
WERE RIGHTS OF FIRST
REFUSAL BACK THEN?
>> YOU MEAN BEFORE 1776?
>> WHAT HAPPENED IN 1776 --
BESIDES THE OBIATE.
>> WHEN I ANSWERED YOUR
QUESTION AT COMMON LAW AT LEAST
BETWEEN 1776 AND THE TIME THAT
THE STATUTE WAS PASSED THERE
WERE RIGHTS OF FIRST REFUSAL.
FLORIDA RECOGNIZED RIGHTS OF
FIRST REFUSE.
>> AND BUT SO DID IT EVER --
WAS IT EVER APPLIED TO THE RULE
AGAINST PERPETUITIES APPLIED TO
IT?
>> YES, YOUR HONOR.
>> THIS COURT NEVER RULED ON
THAT ISSUE, CORRECT.
>> THAT'S CORRECT THE WATERGATE
CORPORATION V. REAGAN CASE IN
1975 RULED BY THE JUDGE OWEN
CASE I ALLUDED TO AND THE
FOURTH DCA 15 MONTHS BEFORE
THIS AGREEMENT WAS ENTERED INTO
SAID THE RULE AGAINST
PERPETUITIES APPLIES TO RIGHTS
OF FIRST REFUSE.
>> I THINK THE REASON YOU WERE
REFERRING TO 1776 IS BECAUSE
THE AMERICAN COMMON LAW ADOPTED
THE ENGLISH COMMON LAW AS IT
EXISTED IN 1776 BUT NOT
THEREAFTER.
>> THEREFORE, WE WERE ON OUR
OWN WE WERE NOT GOING TO RELY
ON THE BRIT APPRECIATE COMMON
LAW, THAT'S RIGHT.
>> ONE OTHER -- WOULD YOU SAY A
RIGHT OF FIRST REFUSAL WOULD
ALWAYS VIOLATE THE RULE AGAINST
PERPETUITIES UNLESS IF THERE
WAS NO TIME LIMIT ON IT?
IN OTHER WORDS, YOU COULD LOOK
IN 1978, IF YOU LOOKED AT THIS
AGREEMENT YOU WOULD SAY EVEN IF
IT WAS INTENDED THAT THE
PROPERTY MIGHT BE SOLD IN THE
NEXT COUPLE OF YEARS THAT IT
VIOLATES THE RULE AGAINST
PERPETUITY?
>> IF THAT INTENTION SHOWS
ITSELF FROM THE AGREEMENT THAT
IT'S ONLY SUPPOSED TO LAST A
FEW YEARS, THEN IT WOULDN'T
VIOLATE THE RULE BUT HERE
MEASURING SIDE IS A CORPORATION
BOTH SIDES ARE CORPORATION IT'S
UNDISPUTED HERE THAT THE INTENT
WAS TO CREATE AN INTEREST
CREATED IN PERPETUITY.
>> AT THE POINT OF THE CONTRACT
BEING ENTERED INTO, THAT
ASSOCIATION AT THAT POINT
ACQUIRED A RIGHT OF FIRST
REFUSAL.
>> THAT ARE RIGHT.
>> THAT'S RIGHT.
>> MAYBE WHY IF IT VESTED -- IF
THE RULE AGAINST PERPETUITIES
DOESN'T SAY YOU CAN'T HAVE AN
INTEREST THAT LASTS TOO LONG AS
JUDGE FARMER SAID, HOW IS THIS
ANYTHING BUT A CONTRACTUAL
RIGHT ACQUIRED AT THE TIME OF
THIS AGREEMENT.
>> IT'S BOTH.
IT WAS A CRACK BUT IT WAS
CONTRACT THAT CREATED AN
EQUITABLE INTEREST IN REAL
PROPERTY AND THAT INTEREST WAS
NOT VESTED.
>> THEN HOW DO YOU DEAL WITH
GOAT YEA IN THAT LAST STATEMENT
THAT SAYS UNTIL THE OPTIONY
EXERCISES THE RIGHT YOU JUST
TALKED ABOUT IN ACCORDANCE WITH
THE TERMS HE HAS NO ESTATE
EITHER LEGAL OR EQUITABLE IN
THE LANDS INVOLVED.
>> I THINK PERHAPS THAT
STATEMENT FROM THAT CASE
DOESN'T AGREE WITH THE MAJORITY
OF CASES THAT DOES SEHE HAS AN
EQUITABLE CASE IN REAL
PROPERTY.
>> WHICH CASE IN FLORIDA T.
CITES THE CASES BEGINNING WITH
KANSAS IN 1902 AND GOES ON BACK
SO IT CITES A LOT OF OTHER
JURISDICTIONS.
I CAN SEE THAT THE MINORITY
VIEW.
>> IT IS, AS FAR AS THE COMMON
LAW IN FLORIDA THAT'S
CONSISTENT WITH THE MINORITY
VIEW, CORRECT.
>> THE WATERGATE CORPORATION
CASE TAKES THE POSITION THAT IT
DOESN'T VEST UNTIL THE PROPERTY
OWNER SELLS THE PROPERTY.
A RIGHT OF FIRST REFUSAL DOES
NOT VEST UNTIL THE PROPERTY
OWNER SEEKS TO SELL THE
PROPERTY, AND THE REASON IS
BECAUSE THIS THIRD PARTY
DOESN'T HAVE ANY RIGHT TO
ACQUIRE THAT PROPERTY UNTIL
THAT TIME.
THE BLACKS LAW DICTIONARY.
>> THE PREEMPTIVE RIGHT.
>> RIGHT.
>> SO IF THE HAD A TIME TRACT
OR NEGOTIATATED TO SELL THIS
PROPERTY SAY TEN YEARS AFTER
THE AGREEMENT, WAS ENTERED
INTO, COULD HE AND THE
CONDOMINIUM ASSOCIATION WANTED
TO EXERCISE THEIR RIGHT OF
FIRST REFUSAL, HOW COULD THE
GRANTER SAY NO YOU CAN'T DO
THAT BECAUSE THIS AGREEMENT
VIOLATES RULES OF PERPETUITY
FROM BEGINNING AND AB INITIO.
>> THE RULE OF PERPETUITIES
CONSIDERS THAT.
IT IS FORGIVING OF PEOPLE WHO
TIE UP PROPERTY IN THE WAY
SOCIETY DOESN'T WANT IT TIED
UP.
IF THE COURT RULES IT DOESN'T
VIOLATE RULE OF PERPETUITIES
AND WAS NOT VOID AB INITIO.
>> WAS FLORIDA A WAIT AND SEE
STATE AT THAT TIME?
>> UNDER THE STATUTE BUT NO NOT
AT THE COMMON LAW, NOT AT 1977.
VOID IS VOID AND THAT'S THE
ORDER OF THE DAY AND THAT'S
WHAT FALLS CHASE RELIED UPON
AND THAT'S CORRECT.
>> WITH OUR ASSISTANCE, YOU'VE
NOW EXHAUSTED NOT ONLY, NOT
ONLY EXHAUSTED BUT USED
ADDITIONAL TIME AND ALTHOUGH
YOU MAY HAVE HAD APPREHENSION
ABOUT INTEREST IN THIS CASE YOU
SEE THE COURT IS INTEREST SODE
WE THANK YOU FOR AN EXCELLENT
PRESENTATION ON BOTH THE COMMON
LAW AND THE CURRENT LAW.
WE'LL TAKE THIS CASE UNDER
ADVISEMENT.
THANK YOU VERY MUCH.