F & B Negotiations, LLC v. Yob

ORDERED.

Dated: June 11, 2025

Jason A Buse 0S”

United Statés Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF FLORIDA

JACKSONVILLE DIVISION

In re:

F & B NEGOTIATIONS, LLC, Case No. 8:23-bk-01532-RCT

Chapter 11

Debtor.

ee

F & B NEGOTATIONS, LLC,

BENJAMIN G. MARTIN,

Plaintiffs,

Vv. Adv. No. 8:24-ap-00207-BAJ

JONATHAN YOB,

4300 CLARCONA OCOEE ROAD, LLC,

FISHER AUCTION COMPANY,

1 OAK REAL ESTATE LLC,

JAY MANAGEMENT CORP.,

2726 6™ AVENUE W, LLC.

Defendants.

ee

FINDINGS OF FACT AND CONCLUSIONS OF LAW

This Proceeding came before the Court for a trial on January 16, 2025, on the Complaint

brought by F & B Negotiations, LLC (“F&B”) and Benjamin G. Martin (“Mr. Martin’)

(collectively the “Plaintiffs”) against Jonathan Yob (“Mr. Yob”), 4300 Clarcona Ocoee Road,

LLC (“4300 Clarcona”), and Jay Management Corp. (“Jay Management”) (collectively “Yob”);

as well as Fisher Auction Company (“Fisher Auction”) and 2726 6TH AVENUE W, LLC (“2726

LLC”).

Procedural History

On April 19, 2023, F&B filed a voluntary petition under Chapter 11 of the United States

Bankruptcy Code (the “Main Case”). As part of its reorganization process, F&B sold various

real estate assets, including property located at 2726 6th Avenue W., Bradenton, FL 34205 (the

“Property”).

In January of 2024, the Court approved the employment of Fisher Auction as the

broker/auctioneer for F&B.1 On February 12, 2024, the Court approved a sale of the Property

pursuant to § 363 of the Bankruptcy Code. The sale was conducted via auction,2 at which Yob

emerged as the high bidder. Approximately four months later, the Plaintiffs initiated this

Proceeding alleging breach of a purchase and sale agreement by Yob for failing to close on the

Property.

Findings of Fact

Fisher Auction distributed marketing materials to solicit potential buyers for the auction

of the Property. Although the pictures in the marketing materials gave the impression that the

Property was unoccupied,3 the materials expressly disclosed otherwise with the following

statement: “Current Partial Lease with Upside Potential.”4 Based upon a review of the

marketing materials, Mr. Yob was under the mistaken assumption that the Property was vacant.5

1 Main Case, Doc. 201.

2 Main Case, Doc. 212.

3 Fisher Auction’s Ex. 29, pp. 87-88.

4 Fisher Auction’s Ex. 29, p. 86.

5 Trial Transcript, p. 157.

On March 28, 2024, the Court held an online auction, and Yob emerged as the high

bidder.6 Prior to the auction, prospective bidders were permitted to inspect the Property either

upon request or at scheduled open houses.7 Mr. Yob, however, chose not to inspect the

Property.8

In early April of 2024, F&B and Yob entered into a purchase and sale agreement (the

“PSA”) for the Property. The Court approved the sale of the Property, based on the terms of

the PSA, which provided that the closing would occur on May 9, 2024.9 Specifically, Section

6(b)(3) of the PSA provided for Yob to take the property subject to “the general printed

exceptions contained in an owner’s title insurance policy,”10 which included exceptions for

“[r]ights or claims of parties in possession” and “[e]xisting unrecorded leases and all rights

thereunder of the Lessee and of any person claiming by, through or under the Lessees.”11

On April 25, 2024, 4300 Clarcona assigned its purchase rights to 2726 6TH Ave W, LLC,

which is another entity owned by Mr. Yob. The day prior to the scheduled closing, counsel for

Fisher Auction sent an e-mail to Mr. Yob that efforts to reach him about the closing had been

unsuccessful. Due to Mr. Yob’s unavailability, the closing did not occur on May 9, 2024, and

was consensually rescheduled by the parties to May 23, 2024. When the second scheduled

closing failed to occur an attorney for F&B sent a notice of default via e-mail to Yob12 stating

that failure to cure the default would result in Yob forfeiting its deposit of $74,900.13 In

response, Yob’s attorney alleged that F&B was in default because tenants residing in the

6 Main Case, Doc. 244.

7 Trial Transcript, p. 26.

8 Main Case, Doc. 256.

9 Main Case, Doc. 268.

10 Fisher Auction’s Ex. 1, p. 7 of 17.

11 Fisher Auction’s Ex. 2, p. 4.

12 Fisher Auction’s Ex. 31; Trial Transcript, p. 77.

13 Fisher Auction’s Ex. 31, p. 2.

Property were veterans, and F&B failed to furnish proof that the tenants were evicted or had

vacated the Property.14 At trial, Mr. Yob testified that his desire to help veterans contributed

to his unwillingness to close.15

David Fernandez, Debtor’s manager, testified that the two tenants at the Property were

indeed veterans and that F&B frequently rented to veterans who receive government housing

assistance.16 Mr. Fernandez also testified that both tenants were relocated to another property

owned by F&B in Palmetto, Florida (the “Palmetto Property”),17 and that one of the tenants

was receiving assistance from the Sarasota Housing Authority.18 The other tenant was not

receiving housing assistance and had no written lease.19 These details however, were not

disclosed by F&B to Yob until the eve of the trial.

Notably, Mr. Yob is a savvy businessman and experienced real estate investor,20 who

is very familiar with the real estate closing process. Specifically, the evidence reflects that Mr.

Yob makes multiple real estate purchases annually, typically through holding companies.21

Discussion

The Court’s analysis will focus on the terms set forth in the PSA. Specifically, the PSA

clearly states under Section 6(b)(5) that the Buyer takes the property subject to “the general

printed exceptions contained in an owner’s title insurance policy,”22 and the Title Commitment

14 Counterclaimants Ex. 20.

15 Trial Transcript, pp. 172, 179.

16 Trial Transcript, pp. 113, 239.

17 Trial Transcript, p. 240 (“I relocated them at our cost.”).

18 F&B presented documentation from the Sarasota Housing Authority that clearly delineated how one tenant was

relocated from the Property to the Palmetto Property. See Fisher Auction Exs.’ 32-34.

19 Trial Transcript, pp. 94, 114.

20 Trial Transcript, pp. 154-155, 172 (Mr. Yob testified that he has 40 years of experience of owning his own

businesses and got his start in real estate when he was very young. He previously owned an electronics

recycling business that operated in ten states. He also served on numerous boards of directors in the Tampa area.

He has “owned a lot of properties” and has “had a lot of tenants.”).

21 See, e.g., Trial Transcript, pp.143, 155 (In 2024, Mr. Yob, through his entities, was the winning bidder of six

online real estate auctions.).

22 Fisher Auction’s Ex. 1, p. 7 of 17.

contains exceptions for “rights or claims of parties in possession” and “[e]xisting unrecorded

leases.”23 Taken together, the Court finds these provisions support a finding that F&B was

under no obligation to transfer title free and clear of the unwritten leases, regardless of whether

or not the tenants vacated prior to closing.

Because the Court finds that the PSA is unambiguous, the clear terms of the PSA must

be enforced. See Nat'l Fire & Marine Ins. Co. v. Adoreable Promotions, Inc., 451 F.Supp.2d

1301, 1307 (M.D. Fla. 2006) (“[T]he court must construe clear and unambiguous contract

language as written and according to its plain sense and meaning”); Dickerson Florida, Inc. v.

McPeek, 651 So.2d 186, 187 (Fla. 4th DCA 1995) (when the contract is clear and unambiguous,

the court must give effect to its clear provisions) (citing Voelker v. Combined Ins. Co. of

America, 73 So.2d 403 (Fla. 1954)); Barnes v. Diamond Aircraft Indus., Inc., 499 F.Supp.2d

1311, 1315 (S.D. Fla. 2007) (“Where the language of a contract is unambiguous, the legal effect

of that language is a question of law”); Gray v. D & J Indus. Inc., 875 So.2d 683, 683 (Fla. 3d

DCA 2004) (“The construction of a contract is a question of law for the courts to determine

where the language used in the written contract is clear, unambiguous, and susceptible to only

one interpretation”).

Yob defaulted by failing to close. Therefore, as clearly set forth in paragraph 9.a. of the

PSA, F&B is entitled to retain the $74,900 deposit as liquidated damages. The Court finds that

Yob’s reliance on the language contained in the PSA under paragraph 6.b is misplaced because

it ignores the controlling, contractual language that follows, which the Court discussed above.

Therefore, it is unnecessary to address Yob’s argument regarding the interplay between §§

363(b), (f) and §365(h).

23 Fisher Auction’s Ex. 7.

Mr. Yob is a sophisticated investor in the real estate market. As such, the Court finds

that there is no equitable remedy that would relieve him of his legal obligations. Additionally,

while Mr. Yob’s concern for veterans is admirable, it does not provide him with a legal

justification for failing to close on the Property. Contractually, F&B was under no obligation

to either evict the tenants or provide proof of them vacating the Property. Further, although

Mr. Yob had the opportunity to inspect the Property prior to the auction he did not do so.24

Only after successfully bidding did Mr. Yob inspect the Property and become aware of the

tenants. Mr. Yob’s reasons for Yob’s failure to close on the Property due to an illness and Mr.

Yob’s concerns over the tenant situation, are insufficient to relieve Yob of its contractual

obligation.25

Conclusion

The PSA required F&B to furnish clear title to Yob, with the following exceptions: (1)

claims of parties in possession; and (2) existing unrecorded leases. Mr. Yob’s incorrect

assumption that the Property was vacant based on the marketing materials is not a legitimate

basis for Yob’s failure to close because (i) Mr. Yob did not avail himself the opportunity to

inspect the Property prior to the auction, and (ii) the marketing materials expressly disclosed

that the Property was leased.

The Court will hold a separate hearing to consider an award of attorney’s fees. The PSA

provides in Section 18 that the non-prevailing party will be liable for the reasonable attorney’s

fees of the prevailing party.26 The Court will, however, consider the reasonableness of the

24 Trial Transcript, pp. 27,147, 149.

25 Trial Transcript, pp. 206

26 Fisher Auction’s Ex. 1, p. 12.

attorney’s fees in light of F&B’s failure to furnish Yob with relevant explanations as to the

tenant situation and documentation until the eve of trial.27

The Court will enter a separate judgment consistent with these Findings of Fact and

Conclusions of Law.

27 The Court encourages the parties to attempt to reach a resolution on the matter of attorney’s fees.