Buyer's Remorse or Force Majeure? Contract Amended Mid-Pandemic Leads to Lawsuit in Miami-Dade
The defendant claims its contractual breach should be excused by a force majeure provision, which waives liability when an agreement is thwarted by something unforeseeable. But the opposing side argues the breakdown was instead "a case of buyer's remorse."
June 17, 2020 at 12:43 PM
4 minute read
Can a party to a contract invoke force majeure forgiveness if the COVID-19 outbreak had already started when they signed on the dotted line?
A Miami-Dade lawsuit seeks to find out.
David B. Rosemberg of Rosemberg Law in Aventura represents real estate holdings company Trumpeter International LLC, which sued after its deal with Spanish citizen Anastasio Vega Garcia fell through during the initial stages of COVID-19-induced closures.
The defendant claims its contractual breach should be excused by a force majeure provision, which waives liability when an agreement is thwarted by something unforeseeable. But Rosemberg argues the breakdown was instead "a case of buyer's remorse."
"When the initial contract was executed, the winds of change were already blowing, in that COVID-19 was already pretty much on everyone's radar around the world," Rosemberg said. "You had parties that amended a contract in the throes of a pandemic, and so it's very hard to say it wasn't foreseeable or it wasn't something that was happening then and there."
Vega Garcia had agreed to pay a $190,000 deposit for the Trumpeter's Miami Beach multi-family building on 650 Euclid Ave. on Feb. 14, according to the complaint. But on March 11 — the day the World Health Organization declared COVID-19 a pandemic — he asked for an amendment that said Trumpeter would make certain repairs to the building.
Another amendment followed March 23, a week after the Spanish government declared a state of emergency, according to the complaint. This time, the parties agreed to move the closing date from March 25 to April 30.
The contract said that if the deal failed to close the seller could keep the deposit, and it said force majeure events included, "hurricanes, floods, extreme weather, earthquakes, fire, or other acts of God, unusual transportation delays, or wars, insurrections, or acts of terrorism, which, by exercise of reasonable diligent effort, the non-performing party is unable in whole or in part to prevent or overcome," according to the lawsuit.
But when the closing date came and went, the Miami Beach law firm serving as an escrow agent for the deposit declined to release it, citing the force majeure provision.
"The crux of it is, is the coronavirus pandemic an act of God?" Rosemberg said.
Escrow agent Staci Rutman and her firm Rutman Law are also defendants in the case. Rutman declined to comment, but her attorney Sheila Oretsky of Buchanan Ingersoll & Rooney in Miami said the plaintiff has agreed to dismiss Rutman Law from the suit.
Vega Garcia's counsel Alexander Orlofsky of the Orlofsky Law Firm in Miami Beach did not provide a comment by deadline.
Thanks to lawsuits like this, Rosemberg says it's widely expected that force majeure provisions will get a lot more specific about pandemics in future. But for now, he said courts across the country are issuing rather different rulings on what does or doesn't constitute an act of God under force majeure provisions.
"Force majeure clauses are something that commercial litigators have been chewing on for three meals a day since the COVID-19 outbreak," Rosemberg said. "The analysis will come down to: What was the hindering force? Was it COVID-19? Was it a government restriction? And you have to look at the specific language of every force majeure provision to see what is contemplated, what is specifically addressed, what is not addressed."
Miami-Dade Circuit Judge Jose Rodriguez will preside over the litigation.
|Read the full complaint:
Read more:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllChicago Midsize Firm Will Combine With Miami Boutique To Form Antitrust Powerhouse
3 minute readAkerman Opens Charlotte Office With Focus on Renewable Energy, Data Center Practices
4 minute readLaw Firms Mentioned
Trending Stories
- 16th Circuit Judges Spar Over Constitutionality of Ohio’s Ballot Initiative Procedures
- 2On The Move: Polsinelli Adds Health Care Litigator in Nashville, Ex-SEC Enforcer Joins BCLP in Atlanta
- 3After Mysterious Parting With Last GC, Photronics Fills Vacancy
- 4Latham Lures Restructuring Partners From Weil, Paul Weiss
- 5Haynes Boone, Hicks Thomas Get Dismissal of $1.3B Claims in 2022 Freeport LNG Terminal Explosion
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250