Daily Development for Tuesday, October 3, 2000

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

DEEDS; REFORMATION: Despite testimony of buyer's lawyer that deed was not intended to include office building, and affidavit of surveyor providing deed description that deed was erroneously prepared, seller was unable to obtain reformation of deed based upon scrivener's error.

Resort of Indian Spring, Inc. v. Indian Spring Country Club, Inc., 747 So.2d 974 (Fla.App. 4 Dist. 1999).

The owner's association of a residential/recreational development negotiated to acquire the clubhouse and recreational facilities. The association was represented by a lawyer and by one if its members, designated "principle negotiator." In the documents presented to the association documenting the sale, there was mention of "office facilities," a term of ambiguous meaning in the context of the deal. Conceivably, this term could have applied to an parcel containing an office building occupied by the developer. The office parcel also included some water facilities related to the rest of the development. Apparently, however, there were also other office facilities in the clubhouse that might have been the object of this reference.

A surveyor was hired to draft the deed, and the deed included the office complex. Five years after the closing, the developers discovered for the first time that their office building had been conveyed to the association, and brought suit for reformation. They included an affidavit of scrivener's error signed by the surveyor. Further, the attorney for the association testified unequivocally that it had not been the intention of the parties to include the office complex in the sale.

Apparently there was virtually no mention of the office complex in any of the negotiations or documents, except for the vague references to "office facilities" mentioned above. Further, the developer's continued occupancy of the facilities appeared to be consistent with its continued development activities the "developer controlled board" remained in place for the entire period.

But the association's negotiator refuted "virtually all" of the testimony of the association's lawyer with respect to the association's expectations. He did agree that there was no specific mention of the office parcel, but stated that he believed throughout that the office parcel was included in the deal. He denied that his attorney had ever told him otherwise, refuting the testimony given by the attorney.

The Florida Court of Appeals had little difficulty denying reformation. There is a high standard for setting aside the provisions of a written instrument based upon mutual mistake, and the testimony of the association's negotiator, apparently credited by the trial court, made the case for the written documents virtually irrefutable.

Comment: We rarely report cases that are almost entirely fact driven and make little change in the common law, but this case is noteworthy because of the role of counsel. It illustrates the fact that a lawyer may be an agent for a client during the course of negotiations, but the agency is limited. Other cases reported here have concluded that the lawyer may be able to transmit the opinions of the clients as their agent, but, absent the clients' express authority, cannot make decisions for them. Thus, it really didn't matter what the lawyer believed here. The real focus was on the understandings of the association, and the association's representative was the critical witness. The seller was unable to prove him a liar, and necessarily lost the case.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 16, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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