Case No. Sc10-2367 Coral Reef Drive Land Development

IN THE SUPREME COURT OF FLORIDA CASE NO. SC10-2367 CORAL REEF DRIVE LAND DEVELOPMENT, LLC, etc. et al., Petitioners, vs. DUKE REALTY LIMITED PARTNERSHIP, a foreign limited partnership, Respondent. On a petition for discretionary conflict review of a decision of the Third District Court of Appeal JURISDICTIONAL ANSWER BRIEF GARY E. LEHMAN BEVERLY A. POHL, ESQ. BROAD AND CASSEL BROAD AND CASSEL One Biscayne Tower, 21st FL One Financial Plaza Two South Biscayne Blvd. 100 S.E. Third Avenue, Suite 2700 Miami, Florida 33131 Fort Lauderdale, Florida 33394 305.373.9400 954.764.7060 Counsel for Respondent TABLE OF CONTENTS Page TABLE OF AUTHORITIES .................................................................................... ii STATEMENT OF THE CASE AND FACTS .......................................................... 1 SUMMARY OF ARGUMENT ................................................................................. 4 ARGUMENT ............................................................................................................. 5 I. NO CONFLICT EXISTS ON THE QUESTION OF WHETHER DOING NOTHING CONSTITUTES SUFFICIENT NEW CONSIDERATION TO SUPPORT THE ENFORCEABILITY OF AN ORAL MODIFICATION…………………………………………...5 II. NO CONFLICT EXISTS ON THE AVAILABILITY OF A “FULL PERFORMANCE” EXCEPTION TO THE BANK STATUTE OF FRAUDS……………………………………………8 III. NO CONFLICT EXISTS ON THE QUESTION OF WHETHER A PARTY TO A CONTRACT DISCLAIMING A JOINT VENTURE MAY, IN A DISPUTE WITH THE OTHER CONTRACTING PARTY, CLAIM TO BE A JOINT VENTURER………9 CONCLUSION ........................................................................................................ 10 CERTIFICATE OF SERVICE ................................................................................ 12 CERTIFICATE OF COMPLIANCE ....................................................................... 12 i TABLE OF AUTHORITIES CASES Page Hardee v. State, 534 So. 2d 706 (Fla. 1988) ............................................................. 1 J Square Enterp. v. Regner, 734 So. 2d 565 (Fla. 5th DCA 1999) ........................... 8 Model Improvement Co. v. Sands, 9 So. 2d 179 (Fla. 1942) ..................................... 6 Mangus v. Present, 135 So. 2d 417 (Fla. 1961) ......................................................... 6 Maryland Casualty Co. v. Krasnek, 174 So. 2d 541 (Fla. 1965) .............................. 7 Reaves v. State, 485 So. 2d 829 (Fla. 1986) .............................................................. 1 Scott v. Sun Bank of Volusia County, 408 So. 2d 591 (Fla. 5th DCA 1981) ............. 7 CONSTITUTIONAL PROVISIONS, STATUTES, AND RULES Art. V, § 3(b)(3), Fla. Const. ........................................................................ 3, 4, 6, 10 § 687.0304, Fla. Stat. ........................................................................................ 4, 7-8 R. 9.210, Fla.R.App.P. ............................................................................................. 12 ii STATEMENT OF THE CASE AND FACTS In this case seeking “conflict” review of a decision affirming a summary judgment of foreclosure on a commercial loan, Petitioners’ Statement of the Case and Facts repeatedly violates this Court’s “four corners rule,” by setting forth extensive “facts” taken from the dissenting opinion below, and from the record. That is improper in a jurisdictional brief. See Hardee v. State, 534 So. 2d 706, 708 n. 1 (Fla. 1988) (“for purposes of determining conflict jurisdiction, this Court is limited to the facts which appear on the face of the opinion.”); see also Reaves v. State, 485 So. 2d 829, 830 (Fla. 1986) (“Neither a dissenting opinion nor the record itself can be used to establish [conflict] jurisdiction”); id. at n. 3 (“The only facts relevant to our decision to accept or reject such petitions are those facts contained within the four corners of the decisions allegedly in conflict.”). Given that standard, the Court should reject Petitioners’ improper Statement of the Case and Facts, and limit consideration of the alleged conflict to those facts found in the majority opinion below. (See Pet. App. pp. 2-7). We restate those pertinent facts here. The Loan Documents governing the parties’ multi-million dollar plans to develop medical office space in Miami-Dade County were “sophisticated written agreements” comprising 118 single-spaced pages (a promissory note, mortgage, security agreement, loan agreement, and proposed joint venture operating 1 agreement, which was to be operative only if certain options were exercised in writing). (Pet. App. 2-3). Those “detailed” and “meticulously documented” Loan Documents, memorializing a $10,000,000 mortgage loan from Duke Realty to Petitioner Coral Reef, contained “more bells and whistles” than once-conventional commercial loan documents. (Id. at 2). Importantly, the Loan Documents required all modifications or waivers to be in writing, and unambiguously provided in Paragraph 9.18 (No Joint Venture) that “[n]otwithstanding anything in any of the Loan Documents or in any other agreement or commitment to the contrary,” the parties did not intend or agree to be joint venturers, unless the Lender (Duke Realty) exercised in writing an option to purchase the property and enter into the proposed joint venture with Coral Reef, according to the detailed terms of the Loan Documents. (App. at 3-4). With that agreement in place, Duke Realty participated actively with Coral Reef in studying the need for medical office space on the property, in monitoring the necessary rezoning process, and in evaluating prospective architects and contractors. Duke Realty also commented on the proposed designs, office layouts, and construction cost estimates. (Pet. App. pp. 4-5). During the “no joint venture” period of the Loan Documents, Coral Reef gave notice in April 2007 that it could not make its payments on interest due, due to “unforeseen circumstances.” Coral Reef contends that a principal of Duke 2 Realty then “unequivocally committed” to Duke exercising its option at the conclusion of the loan period, and in reliance on that alleged oral statement Coral Reef made no effort to refinance the loan or sell the property, or to meet its payment obligations. Six months later, in October 2007, Duke Realty sent a notice of default on the loan, which was “squarely inconsistent” with any belief by Coral Reef that Duke would exercise its purchase option in two months. Coral Reef contends that it was assured that the default notice was a “mere formality,” and that Duke in fact intended to exercise its purchase option by December 14. (Pet. App. 5-6). But Duke did not exercise its written option to purchase the property. Instead, it sought and obtained a judgment of foreclosure, based on the admitted nonpayment and the remedies set forth in the Loan Documents. Assuming that Duke Realty made the oral statements as alleged, lulling Coral Reef into continued inaction, the question on appeal was whether an oral modification barred summary judgment on Duke’s claim for foreclosure on the delinquent loan. The District Court found the alleged oral agreement to be unenforceable. In this Court, Petitioners assert “express and direct conflict” with prior precedents of this Court and other district courts, claiming that jurisdiction lies under Article V, § 3(b)(3), Florida Constitution. We show below why no such conflict exists, and why this Court has no jurisdiction and must deny review. 3 SUMMARY OF ARGUMENT Petitioners have failed to demonstrate the requisite “express and direct” conflict for this Court’s jurisdiction, on any of the three questions of law discussed in the Petitioners’ Jurisdictional Brief. See Art. V, § 3(b)(3), Fla. Const. This case arose in the context of a major commercial loan foreclosure, where the parties’ detailed and uniquely extensive Loan Documents governed their relationship. Those Loan Documents disclaimed a joint venture, and required modifications to be in writing. Petitioners wish to enforce an alleged oral modification of the Loan Documents, contrary to the documents themselves, and contrary to the Bank Statute of Frauds, § 687.0304, Fla. Stat.. None of the supposed “conflict” cases arose in a similar factual context, where a borrower claims that its nonpayment of existing repayment obligations constituted new and legally valid consideration for an oral loan modification; where that same nonpayment is claimed to be “full performance” of an oral agreement excusing the writing requirements of section 687.0304; or where a borrower claims to be a joint venturer with the lender, in a dispute between the contracting parties, despite unambiguous language in their detailed and specific loan documents providing that a joint venture does not exist unless certain options were exercised (and they were were not). In sum, Petitioners rely on out-of-context general legal principles that do not control this foreclosure case, which is governed by detailed Loan Documents. 4 They have failed to demonstrate “express and direct” conflict with any case on the same question of law. This Court has no jurisdiction to review the decision below. ARGUMENT I. NO CONFLICT EXISTS ON THE QUESTION OF WHETHER DOING NOTHING CONSTITUTES SUFFICIENT NEW CONSIDERATION TO SUPPORT THE ENFORCEABILITY OF AN ORAL MODIFICATION Despite the context of this case, involving extraordinarily detailed Loan Documents governing a $10,000,000 commercial loan, Petitioners’ theory to avoid foreclosure is that it reasonably relied on Duke Realty’s oral representations that it would

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