Let Them Eat Cake

But only once, according to the Third DCA:

The Third District Court of Appeal on Wednesday upheld a Miami-Dade Circuit Court judge's ruling that barred buyers in the ill-fated 49-story 1390 Brickell Bay condominium project from seeking possible profits from the sale of their units had they been built.

Developer Kenneth Baboun and his company BBB Group abandoned the $90 million project in February 2006, blaming hurricane-related delays and rising construction costs.

Baboun returned to the buyers their deposits plus interest. The deposits amounted to 20 percent of the purchase price, which ranged from $350,000 to $1 million.

But nearly 60 buyers, many of whom bought in 2003 when real estate prices were escalating, sued for breach of contract claiming they were due the ''benefit of their bargain,'' or the difference between their unit's purchase price and what it might have resold for had it been built.

A lawyer for the buyers told The Miami Herald in April 2006, when the suit was filed, that damages would start at $200,000 per unit even with the onset of the softening real estate market. More than 300 units were planned in 1390 Brickell Bay.

''What the plaintiffs in this case really wanted was to turn my clients upside down and shake some money out of their pockets,'' said Lee Stapleton, a lawyer with Baker & McKenzie, who represented the developer.

The buyers' lawyers didn't return two calls. It's not clear if they will seek a rehearing on the court's ruling.

When the developer returned the deposits to buyers, a letter attached stated that cashing the check would serve as an ''accord and satisfaction'' of the terms of the purchase contract.

All but 12 of the purchasers who sued cashed their checks, but later argued there was no intent to settle with the developer.

Miami-Dade Circuit Judge Ronald M. Friedman granted final summary judgment in favor of the developer last year, but the plaintiffs appealed.

The Third DCA ruled the purchasers shouldn't have cashed their checks if they wanted the developer to be obligated under the contracts.

'The person cannot `have his cake and eat it too,' '' the court said in its opinion.

Ha ha ha, always good for an appellate court to throw in a funny line when addressing an epic and deepening mortgage and housing crisis in South Florida that has yet to hit bottom. Those goofs!

BTW, why didn't the reporter identify the lawyers who brought the suit, and who didn't return the phone calls? Hey Stephen P. Walroth-Sadurni, somebody likes you, I mean REALLY likes you. And nice job Lee Stapleton -- thanks for reminding me the Miami office of Baker & McKenzie is still open.

You can read the opinion here. Although I believe the underlying lawsuit was fundamentally flawed -- and the plaintiffs' theory of recovery utterly untenable -- I still find the opinion lacking and somewhat outcome-determinative.

In a nutshell, because the court felt the plaintiffs here didn't "deserve" to have their cake and eat it too, the court ruled that a letter accompanying a returned deposit check constituted "accord and satisfaction." Further, the court found that the act of cashing the check showed the requisite intent on the part of the buyers to give up their rights under the original contract. In translation, what this means is the Third felt the developer did right by these buyers by returning to them their deposits (increasingly rare these days) so these buyers really have no right to complain.

I agree, but is that "legal" reasoning?

How many of these people were lawyers and knew they were voluntarily relinquishing their rights under a written contract by cashing a check that returned to them their own money? How many read the letter? Shouldn't they have been required to sign something besides a check to indicate actual knowledge that their contracts are being cancelled -- like maybe the letter advising them of the termination of their rights?

Maybe I should include accord and satisfaction language on the back of every check I write, even when I am writing a check that was called for under a contract. Hell, I'll even add some release language on the back of the check just because I'm a belt-and-suspenders kind of guy. That way I can never be sued for anything. Makes sense, right?