Inspiration Yacht Charters, Inc. v. Inspiration Yacht Charters II, Inc.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-14931
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D.C. Docket No. 1:09-cv-20472-WMH
INSPIRATION YACHT CHARTERS, INC.,
a Foreign Corporation,
llllllllllllllllllllllllllllllllllllll Plaintiff –Appellee,
llllllllllllllllllllllllllllllllllllllll Ap
versus
INSPIRATION YACHT CHARTERS II, INC.,
a Foreign corporation,
llllllllllllllllllllllllllllllllllllllll Defendant – Appellant,
lllllllllllllllllllllllllllllllll
ALLIED MARINE, LLC,
a Florida corporation,
llllllllllllllllllllllllllllllllllllll Defendant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(August 29, 2012)
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Before BARKETT and PRYOR, Circuit Judges, and LAWSON,∗ District Judge.
PER CURIAM:
This case arises out of a contract for the sale of a yacht. Inspiration Yacht
Charters I, Inc. (“Seller”), agreed to sell the yacht to KK Aggregates, Inc., for $7
million, with a $690,000 security deposit to be held in escrow by KK’s broker,
Allied Marine, LLC. KK Aggregates assigned its interest in the agreement to
Inspiration Yacht Charters II, Inc. (“Buyer”), a corporation established by KK to
hold the title to the yacht.
Closing documents were executed by both parties on the day of closing,
February 12, 2009, in the Bahamas, where the ship was delivered to effectuate the
transfer. However, the Buyer refused to release the $7 million purchase fee from
escrow and requested additional closing documents, including a bill of sale
notarized in Holland. Over the next seven days, the attorneys for both parties
worked in Holland and in Florida to provide the documentation requested, and the
owner of the yacht signed another bill of sale in Holland with the requested
notarization on February 19, 2009. However, on February 18, 2009, the Buyer’s
counsel in Florida advised the Seller that the sale was terminated and demanded
∗ Honorable Hugh Lawson, United States District Judge for the Middle District of Georgia,
sitting by designation.
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return of the full $7 million held in escrow arguing that because all the required
documents had not been provided on the day of closing, the Seller had breached
the contract.
We find no reversible error in the district court’s judgment, after a bench
trial, that it was the Buyer who had breached, and the Seller was entitled to retain
half of the $690,000 security deposit pursuant to the contract.1 The Buyer
concedes that the agreement does not expressly provide that “time is of the
essence” to performance,2 but argues that a timeliness requirement can be inferred
from the fact that the parties agreed to delay the closing date in two addenda to the
contract, and from the fact that a provision of the contract designated a particular
date for the closing. However, as the district court found, the fact that the parties
twice agreed to delay the closing date indicates that time was not an essential part
of the agreement, and the mere fact that an agreement specifies a particular date for
closing does not by itself establish that failure to provide the documents at issue on
that date constitutes breach. See Westcap Gov’t Sec. Inc. v. Homestead Air Force
1 Pursuant to the contract, the remaining one-half of the security deposit was ordered to
be divided equally between the brokers involved in the transaction, Allied Marine, LLC, and
International Yacht Charters, Inc., a non-party.
2 Under Florida law, a party’s failure to perform an aspect of its contractual obligations on
or before a certain date may constitute breach when “(1) the agreement explicitly so specifies; or
(2) such may be determined from the subject matter of the contract; or (3) treating time as non-
essential would produce a hardship; or (4) notice has been given to the defaulting party
requesting performance within a reasonable time.” Centurion Air Cargo, Inc. v. UPS Co., 420
F.3d 1146, 1151 (11th Cir. 2005).
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Base Fed. Credit Union, 697 F.2d 911, 914 (11th Cir. 1983) (holding that, under
Florida law, seller’s delivery eight days after contractually designated performance
date did not constitute breach absent any showing of damages due to the delay).
Moreover, the district court alternatively held that the Buyer waived any
time is of the essence requirement. Because the same facts were relevant to the
district court’s alternative holding as were relevant to whether time was of the
essence, we find no error in the district court’s alternative holding.3
The order of the district court is AFFIRMED. Inspiration I’s motion for
sanctions pursuant to Rule 38 is DENIED.4
3 We reject as meritless the Buyer’s argument that it should be permitted to recover the
security deposit because it was entitled to rescind the contract.
4 We decline to grant Inspiration I’s motion for sanctions in this case. Cf. Davis v. Carl,
906 F.2d 533, 538 (11th Cir. 1990) (“[C]reative claims, coupled even with ambiguous or
inconsequential facts, may merit dismissal, but not punishment.”).
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