Opposition Brief — Chesler v. Stadler Associates, Inc.

In The

Supreme Court of the United States

October Term, 1984

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ALAN CHESLER AND SHEILA CHESLER,

Appellant,

vs.

STADLER ASSOCIATES, INC.,

Appellee.

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ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE ELEVENTH CIRCUIT

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—)—

BRIEF IN OPPOSITION

TO PETITION FOR CERTIORARI

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Epmunp P. Russo, Esquire

Attorney for Appellee

Russo, Arten & Baker, P.A.

4675 Ponce de Leon Blvd.

Suite 301

Coral Gables, Florida 33146

(305) 665-0414

COCKLE LAW BRIEF PRINTING CO., (800) 835-7427 Ext. 333

BES! AVAILABLE COPY

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RESTATEMENT OF QUESTIONS PRESENTED

1. WHETHER THE TRIAL COURT WAS CLEAR-

LY ERRONEOUS IN FINDING THAT THE SELLING

BROKER HAD NOT WAIVED ITS RIGHT TO 25%

OF THE DEPOSIT.

2. WHETHER THE TRIAL COURT WAS CLEAR-

LY ERRONEOUS IN FINDING THAT NO EVIDENCE

OF A LISTING BROKER—SELLING BROKER AGEN-

CY RELATIONSHIP WAS PRESENTED AT TRIAL.

Pursuant to Rule 28.1, the following are

affiliates of STADLER ASSOCIATES, INC:

The Stadler Corporation

Stadler Properties, Inc.

South Florida Referral Ser ices, Inc.

Stadler Real Estate School, Inc.

Stadler Mortgage Corporation

Stadler Insurance Agency, Inc.

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TABLE OF CONTENTS

RESTATEMENT OF QUESTIONS PRESENTED...

STATEMENT OF THE CASE.

SUMMARY OF THE ARGUMENT ......

ARGUMENT AND CITATION OF AUTHORITY:

A. The Trial Court Was Not Clearly Erroneous

In Finding That Stadler Did Not Waive Its

ee Th Te es atin

B. The Trial Court Was Not Clearly Erroneous

In Finding That No Evidence Of An Agency

Relationship Between South Dade And Stad-

ler Was Presented At Trial. 0.

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TABLE OF AUTHORITIES

CITATIONS

Adams v. Askew, 511 F.2d 700 (Sth Cir. 1975) 00...

Arbogast v. Bryan, 393 So.2d 606 = 4th D.C.A.

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Ennis v. Warm Minera! Springs, Inc., 203 So.2d 514

I

Fidelity and Casualty Co. of New York v. D.N.

Morrison Construction Co. of Virginia, 156 So.

Sa

Hill York Corp. v. American International Fran-

chises, Inc., 488 F.2d 680 (Sth Cir. 1971) oo.

Martinez v. Dixie Carriers, Inc., 529 F.2d 457 (Sth

| ao sido apc NR a eo

Matter of Multiponics, Inc., 622 F.2d 709 (Sth Cir.

AL ie

Richards v. Dodge, 150 So.2d 477 _— 2d D.C.A.

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Southernmost Humane Society Inc. v. City of Key

West, 365 So.2d 402 (Fla. 3d D.C.A. 1978)

Rute CiIrep

Federal Rules of Civil Procedure 52 oo.

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5, 6

STATEMENT OF THE CASE

The underlying transaction in this case was the sale

of real property. Sellers - ALAN and SHEILA CHES-

LER (‘‘CHESLERS”) had listed their house for sale

with SOUTH DADE REALTY, INC. (“SOUTH DADE”).

(T.3). STADLER ASSOCIATES, INC. (‘‘SSTADLER”)

found a prospective purchaser for the CHESLERS’ house.

(T.3).

On February 24, 1980, the CHESLERS attended a

meeting at the office of SOUTH DADE. (T.32). At this

meeting, STADLER presented to the CHESLERS an all

cash offer from EMPIRE CORPORATION (“EMPIRE”)

for the CHESLERS’ house at the listing price of

$535,000.00. (T.86). The CHESLERS were reluctant to

accept EMPIRE’S offer because of doubts they had con-

cerning EMPIRE’S ability to meet the financial require-

ments of the contract (T.87).

The last paragraph of the Purchase and Sale Agree-

ment labelled ‘‘Fee to Breker” provided that in the event

of EMPIRE’S default, EMPIRE forfeited its right to

the deposit and the CHESLERS would receive 50% and

brokers 50%. (R.10). SOUTH DADE, through sales as-

sociate JOAN GRADY volunteered to waive its right to

the deposit to be made by EMPIRE should EMPIRE de-

fault in its performance. (T.109). ROSALIE ELLIOTT

of STADLER did not agree to waive STADLER’S right

to the deposit in the event of EMPIR}P’S default. (T.109).

ROSALIE ELLIOTT left the meeting after forty-five

minutes. (T.86). MR. APPLESTEIN, friend of the

CHESLERS and an investor, drafted a waiver of de-

posit agreement after ROSALIE ELLIOTT’S departure.

(T.53).

1

JOAN GRADY signed the waiver agreement as agent

for SOUTH DADE. (R.248). The CHESLERS then

signed the Purchase and Sale Agreement. (T.22). EM-

PIRE placed a deposit of $51,700.00 with BANK OF

FLORIDA as Escrow Agent. (T.8).

On June 30, 1980, EMPIRE filed suit in U.S. District

Court for the Southern District of Florida against the

CHESLERS, SOUTH DADE, STADLER and BANK OF

FLORIDA. (R.1). EMPIRE alleged that the CHESLERS

were in breach of the Purchase and Sale Contract. (R.1).

Defendants, SOUTH DADE and STADLER cross-

claimed against Defendants/CHESLERS and Defendant/

BANK OF FLORIDA for their 25% shares of the de-

posit. (R.204,215). EMPIRE’S Complaint was dismissed

on April 14, 1982. (R.199).

A non-jury trial was held on the crossclaims of

SOUTH DADE and STADLER on April 11, 1984. The

trial court entered Final Judgment on June 27, 1984.

(R.279-280). SOUTH DADE’S crossclaim was denied.

STADLER was awarded 25% of the deposit, plus costs

and attorneys fees. Defendant/CHESLERS filed a No-

tice of Appeal from the award to STADLER on July

16, 1984. (R.281).

_ The issue for review is whether the trial court clear-

ly erred in its findings of facts that STADLER did not

waive its right to the deposit, and that a STADLER-

SOUTH DADE agency relationship was not presented

at trial. The applicable standard of review is the clearly

erroneous standard. Findings of fact shall not he set

aside uniess clearly erroneous. Fed. R. Civ. P. 52(a).

The court of appeals can overturn a trial court’s fact

finding only if it was left with the definite and firm con-

viction that such a finding was mistaken. Martinez v.

Diate Carriers, Inc., 529 F.2d 457 (5th Cir. 1976).

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SUMMARY OF THE ARGUMENT

Appellee’s argument for the first issue is that the

evidence of record substantiates the trial court’s findings

of fact. The trial judge had the opportunity to weigh the

testimony of the witnesses and to evaluate all of the

evidence presented before making his findings of fact.

These findings of fact should not be set aside because

Appellant has not met his burden of proof showing the

findings to be clearly erroneous.

Appellee’s argument for the second issue is that the

Appellant is precluded from introducing on appeal, an

issue that was not presented to the trial court. The trial

judge specifically found that Appellant’s issue was not

presented to him. The facts of record do not support

the argument by Appellant.

ARGUMENT

A. The Trial Court Was Not Clearly Erroneous In

Finding That Stadler Did Not Waive Its Right

To The Deposit.

In his findings of fact, Judge Eaton specifically found

that STADLER, through its sales associate ROSALIE

+

ELLIOTT, did not waive its right to the deposit. (T.109).

Appeilant, nevertheless, argues that ROSALIE ELLI-

OTT’S silence at the February 24, 1980 meeting amounts

to an acceptance of the waiver agreement.

Appellant’s argument is faulty in two respects. First,

in order for the court to find a waiver through silence,

the court must also find that the trial judge sitting us fact

finder was clearly erroneous in his finding that STADLER

did not waive its contractual right to the deposit. The

trial court had the opportunity to hear the testimony of

all the witnesses. An appellate court may not consider

evidence de novo, and must be particularly reluctant to

disregard a finding based on evaluation of testimony

drawing credibility into question. Matter of Multiponics,

Inc., 622 F.2d 709, 722-723 (5th Cir. 1980).

Based on the testimony presented, the trial judge

found “the effort to establish a waiver through MISS

ELLIOTT on the part of STADLER, meaning either

that the Jady joined in the written contract, the terms of

it by oral agreement or reached some similar or other oral

agreement to waive simply has not been established by

the evidence.” (T.109).

The trial court addressed ROSALIE ELLIOTT’S si-

lence, but did not find her conduct amounting to an ac-

ceptance under the cirenmstances.

COURT: I do not think that the other lady was

doing anything but sitting there and observing this

fiasco, you understand, as best I can arrive at it,

so that there is no way that MR. TEW (CHESLERS

attorney) had proved up any meeting of the minds

or contractual agreement or joining in with this writ-

ten contract. (T.107).

~_

The trial judge then concluded that the CHESLERS

had not met their burden of proving vy a preponderance

of the evidence that a contract between STADLER and

CHESLER existed.

COURT: I am talking about the people that were

selling this property or trying to sell it have the

burden of showing that contract by the preponderance

of the evidence, and that is not even close in con-

sidering the weight of the testimony before us.

(T.109).

The evidence amply supports the trial court's find-

ings, and they should not be disturbed on appeal.

Second, Appellant argues that MISS ELLIOTT’S si-

lence estops STADLER from asserting its right to the

deposit or waives its right to the deposit. In support

of this argument, Appellant cites two cases, Richards v.

Dodge, 150 So.2d 477 (Fla. 2d D C A 1963) and Arbogast

v. Bryan, 393 So.2d 606 (Fla. 4th D C A 1981). Both of

these cases stand for the general rule than an estoppel

may under certain circumstances be created by silence.

To create an estoppel by silence, there must be some duty

to speak and some detrimental reliance thereon. Ennis v.

Warm Mineral Springs, Inc., 203 So.2d 514 (Fla. 2d D.C.A.

1967), cert. demed, 210 So.2d 870. Mere silence or inaction

in and of itself will not create an estoppel. Southernmost

Humane Society v. Key West, 365 So.2d 402 (Fla. 3d

D.C.A. 1978). Neither STADLER nor its employee were

under any duty to speak at the February 24, 1980 meeting.

The Appellant makes no argument that STADLER was

under a duty to speak or that the CHESLERS detri-

mentally relied upon STADLER’S silence.

Arbogast and Richards provide no support for Ap-

pellant’s argument. In Richards and in Arbogast, the

‘*silences” which led to a waiver were lengthy in duration.

In Richards, 150 So.2d at 482, a tenant was estopped from

asserting a breach of covenant against his landlord be-

cause he was deemed to have waived his right by his three

month silence. In Arbogast, 393 So.2d at 607, a real es-

tate salesman was estopped from asserting that his em-

ployment contract was void as against public policy be-

cause he was silent for six years and reaped benefits from

his silence.

The February 24, 1980 meeting lasted some four

hours. (T.69). ROSALIE ELLIOTT left after forty-five

minutes. Various aspects of the underlying real estate

were discussed before her departure. The trial court

specifically found that ROSALIE ELLIOTT did not par-

ticipate in the conversation concerning waiver of deposit.

(T.105). ROSALIE ELLIOTT’S silence was momentary.

She did not have a duty to speak. There was no reliance

detrimental or otherwise on ROSALIE ELLIOTT’S si-

lence. The CHESLERS, if they relied on anything, re-

lied on the advice of MR. APPLESTEIN, an investor and

current husband of SHEILA CHESLER. He was pres-

ent at the February 24, 1980 meeting (T.61), and authored

the waiver agreement. (T.51).

Appellant’s argument that STADLER waived its

right to the deposit by ROSALIE ELLIOTT’S silence is

insufficient on its face because neither duty to speak nor

detrimental reliance are shown by the established facts.

7

B. The Trial Court Was Not Clearly Erroneous In

Finding That No Evidence Of An Agency Rela-

tionship Between South Dade And Stadler Was

Presented At Trial.

Appellant’s second argument that SOUTH DADE

was acting for STADLER is without support in the record.

The trial court specifically stated that this issue had

not been presented at trial.

COURT: The only way in the world that STADLER

REALTORS would not be entitled to this would be

if in fact under the circumstances of the arrangement

SOUTH DADE REALTY does in fact find itself in

the position to waive for both parties. This would

require considerable discussion about the trade, es-

tablished practices in the trade, all sorts of presenta-

tions which have not been presented, were not raised,

not urged and not a part of this situation. (T.108).

Appellant is precluded from presenting in this appeal

the theory that SOUTH DADE was STADLER’S agent.

A court of appeal will not consider issues raised for the

first time on appeal. Adams v. Askew, 511 F.2d 700, 705

n.9 (5th Cir. 1975). A theory not presented to the trial

court will not be entertained for the first time on appeal.

Hill York Corp. v. American International Franchises,

Inc., 488 F.2d 680, 690 (Sth Cir. 1971).

Even if this court were to consider Appellant’s the-

ory, the facts of record do not substantiate the argument.

The fact that ROSALIE ELLIOTT of STADLER and

JOAN GRADY of SOUTH DADE cooperated on the real

estate transaction does not create an agency relationship.

Appellant asserts that the record shows that JOAN

GRADY was put into a position by ROSALIE ELLIOTT

of STADLER whereby the CHESLERS would believe

8

that MISS GRADY’S signature on the commission waiver

agreement would also bind STADLER. Appellant, how-

ever, fails to state how ROSALIE ELLIOTT put JOAN

GRADY in this position, fails to state how and why the

CHESLERS believed this, and fails to cite to a particular

page or portion of the record to support this statement.

ROSALIE ELLIOTT testified that she had objected

to waiving her portion of the deposit (T'.92,93,94), and

that she left the meeting held at South Dade Realty be-

fore the waiver agreement had been drafted, (T.89,90)

and was unaware of its existence until the trial. (T.90,99).

There was no testimony of record by the CHESLERS

indicating that they were under the belief that SOUTH

DADE was acting as agent for STADLER.

In Fidelity and Casualty Co. of New York v. DN.

Morrison Construction Co. of Virginia, 156 So.2d 385,

387 (Fla. 1934), the court cites the general rule that

agency by estoppel has three primary elements: (1) a

representation by the principal; (2) reliance on the rep-

resentation by a third person; and (3) a change of posi-

tion by the third person, in reliance upon such represen-

tation. The Fidelity court goes on to state that it is es-

sential to application of the general rule that the follow-

ing two important facts be clearly established: (1) “That

the principal hold the agent out to the public as possessing

sufficient authority to embrace the particular act in ques-

tion, or knowingly permitted him to act as having such

authority; and (2) that the persons dealing with the agent

knew of the facts, and acting in good faith, had reason

to believe that the agent possessed the necessary author-

itv.” Fidelity at 387.

9

Appellant states the general rule and asserts that

‘joint procurement and negotiation of the contract, the

cooperative signature and agreement as to the real estate

commission on the Purchase and Sale Contract, and the

joint participation at the meeting on February 24, 1980”

is sufficient evidence to create such agency.

The very case that Appellant relies upon is very spe-

cific in prescribing the evidence necessary to find such

agency. Appellant has not shown, nor does the record

show that STADLER held out SOUTH DADE as its

agent to the public, nor does the record show that STAD-

LER knowingly permitted SOUTH DADE to act as hav-

ing such authority. ROSALIE ELLIOTT’S testimony in-

dicated that she was unaware of JOAN GRADY of

SOUTH DADE’S waiver until the trial. (T.90,99). ROS-

ALIE ELLIOTT testified that she did not give JOAN

GRADY the authority or permission to waive STAD-

LER’S right to the deposit. (T.97). There was no evi-

dence to the contrary presented and the trial court ac-

cepted MISS ELLIOTT’S testimony as competent evi-

dence.

Joint participation in procurement and negotiation

of the contract, and joint participation at the February

24, 1980 meeting would indicate the converse of what Ap-

pellant asserts; that is that SOUTH DADE was not acting

as agent for STADLER but rather that each realty was

acting on its own behalf.

The record fails to show a representation by STAD-

LER that SOUTH DADE was its agent, fails to show

that the CHESLERS relied on a representation, and fails

to show a change in position by the CHESLERS in re-

10

liance on STADLER’S representation. The record does

indicate, however, that the CHESLERS’ change in posi-

tion was in reliance on MR. APPLESTEIN’S advice and

judgment, (T.106,52) and that he authored the waiver of

deposit addendum to the sales contract. (T.51).

CONCLUSION

Petitioner has not shown that this decision of the

United States Court of Appeals for the Eleventh Circuit

is in conflict with a decision of another court of appeals.

Petitioner has also not shown that the Eleventh Circuit

departed from the accepted and usual course of judicial

proceedings or sanctioned such a departure by the trial

court so as to warrant the exercise of this Court’s juris-

diction.

WHEREFORE, Respondent respectfully requests

that the Supreme Court of the United States deny the

petition for certiorari.

Respectfully submitted,

Epmunp P. Russo

(Counsel of Record)

Russo, Atten & Baker, P.A.

4675 Ponce de Leon Boulevard

Suite 301

Coral Gables, Florida 33146

(305) 665-0414

Attorney for Appellee,

Stadler Associates, Inc.

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