Key Points

  • The Third District Court of Appeal reversed the with-prejudice dismissal of five consolidated suits by pre-construction condominium buyers against Parque Towers Developers, LLC.
  • The court held that applying res judicata would unjustly frustrate the purchase agreements' express bargain, under which the developer was to refund deposits exceeding 15% of the purchase price if a buyer failed to close.
  • The buyers alleged the developer resold the five units for $6,440,000, above the $6,265,000 combined contract price, while retaining $3,144,500 in deposits.
  • The panel relied on Florida Supreme Court precedent that res judicata will not be invoked where it would defeat the ends of justice, and noted a cloud on the record as to whether the doctrine's four identities existed because the developer never appealed its loss on its counterclaim.
  • The cases were remanded for further proceedings, and the opinion is not final until disposition of any timely rehearing motion.

A Florida appeals court on Wednesday revived five lawsuits in which pre-construction condominium buyers seek part of the $3,144,500 in deposits their developer kept after reselling their units. The court held that res judicata, the doctrine that bars a party from relitigating a claim that was or could have been brought in an earlier suit, could not be applied to block the buyers' claims that their contracts require a refund.

Judge Logue wrote the opinion for a Third District Court of Appeal panel that also included Judges Lindsey and Gooden. The panel reversed an order by Miami-Dade Circuit Judge William Thomas that had dismissed the buyers' consolidated actions against Parque Towers Developers, LLC with prejudice. Judge Thomas had called the outcome "unfair and inequitable" but ruled that res judicata required it. In doing so, Judge Logue wrote, "the seasoned trial judge overlooked the line of authority that allows res judicata to be overridden when its mechanical application would work an injustice."

The decision returns the buyers' refund claims to the trial court. Under the purchase agreements, the developer promised to return deposits that exceeded 15% of a unit's purchase price if the buyer failed to close. The buyers alleged that the developer resold the five units for a total of $6,440,000, more than their combined contract price of $6,265,000, while keeping every deposit. "Under the facts and circumstances of this case, we hold the application of res judicata would unjustly frustrate the express bargain reached by the purchasers and developer when they entered into the purchase agreements," Judge Logue wrote.

The five sets of buyers, led by Pilac Management, Ltd., first sued separately for rescission and the immediate return of their deposits. They alleged that the developer had breached the agreements by failing to substantially complete the units by the estimated completion date of December 31, 2017. The developer counterclaimed that the buyers had breached by failing to close.

After a non-jury trial in the consolidated cases, the trial court ruled for the buyers on both their claims and the counterclaim, finding them "entitled to the return of [their] deposits as damages." The developer appealed only the judgment on the buyers' claims. It did not appeal its loss on the counterclaim.

In the resulting 2024 decision, known as Parque I, the Third District reversed in part. The court held that "the agreements did not create an affirmative obligation for the developer to complete the units by a date certain or otherwise make time of the essence." A footnote added that the court "t[ook] no position on any other remedy the Purchasers may have exercised had they desired to exit the contract prior to the notice of closing."

On remand, the buyers asked to add supplemental claims over the disputed deposits. The trial court refused, finding that it "only ha[d] jurisdiction to enforce the mandate," and entered judgment for the developer. The buyers then filed five new suits. Each alleged that the developer breached Section 13 of the purchase agreements by failing to refund the excess deposits, and each sought rescission under sections 718.202(1)(a) and (5), Florida Statutes.

Section 13 provides that if a buyer defaults after paying 15% of the price, the seller "shall refund to the Purchaser any amount which remains in excess of" either 15% of the price or the seller's damages from the breach, "whichever is greater." The buyers alleged that the developer "failed or refused to calculate its damages and to refund the excess deposit amounts."

The developer moved to dismiss the new suits as barred by res judicata. The buyers responded that the doctrine does not apply where it would work an inequity, and that the developer would collect a windfall. Judge Thomas dismissed the cases. His order said it "would appear unfair and inequitable for [the developer] to be able to keep all of the deposits paid by [the purchasers]," but concluded that Parque I bound him.

Under Florida law, res judicata requires four "identities" between the old and new suits, including the same thing sued for and the same cause of action. The panel questioned whether those identities existed here. "There exists some cloud on the record concerning whether all the necessary identities exist for res judicata because the trial court ruled against the developer's counterclaim in the prior proceeding and that ruling was never appealed," Judge Logue wrote.

The panel did not resolve that question. It relied instead on a 2003 Florida Supreme Court decision, State v. McBride, which said the high court "has long recognized that res judicata will not be invoked where it would defeat the ends of justice." The panel also quoted a 1953 Supreme Court decision stating that "the State, as well as the courts, is more interested in the fair and proper administration of justice than in rigidly applying a fiction of the law designed to terminate litigation."

The Third District has spoken to purchase agreements specifically. Judge Logue quoted the court's 2022 decision in Hess v. PMG-S2 Sunny Isles, LLC, which said that "[t]he interests of justice . . . are necessarily implicated . . . where a party argued all terms of a purchase agreement are enforceable, but now seeks to evade the impact of some provisions and obtain a windfall."

"We agree with the trial court's recognition of the unfairness and inequity that results from the denial of the purchasers' claim to enforce the purchase agreement," Judge Logue wrote. The panel did not decide how much, if anything, the developer owes.

Lawyers for the buyers included David P. Reiner, II of Reiner & Reiner, P.A. Lawyers for the developer included Robert P. Frankel of the Law Offices of Robert Frankel, P.A.

The panel reversed the dismissal and remanded the cases to the Miami-Dade circuit court for further proceedings consistent with the opinion. The decision is not final until the court disposes of any timely motion for rehearing.