AMER. NAT. SELF STORAGE v. Lopez-Aguiar
1988 WL 18583, 521 So. 2d 303 (1988)
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Rule of Law:
Under the doctrine of merger, express warranties in a real estate sales contract that are collateral to the main purpose of conveying title, such as those concerning utility access, are not extinguished by the acceptance of a deed that is silent on those matters. Such collateral agreements survive the closing because they are not performed or satisfied by the mere delivery of the deed.
Facts:
- Carlos Lopez-Aguiar entered into a contract to sell a parcel of real property to American National Self Storage, Inc.
- The contract of sale included an express warranty stating that 'water, sewer and electric service are presently available at the property line or lines of the premises with sufficient capacity to accommodate a 45,000 sq. ft. office/warehouse building.'
- American National Self Storage learned before closing that the water and sewer connections were not at the property line as warranted.
- The parties proceeded with the closing, and the deed conveying the property did not contain the warranty regarding utility availability.
- After closing, American National Self Storage incurred costs of more than $25,000 to extend the water and sewer lines to its property.
Procedural Posture:
- American National Self Storage, Inc. (purchaser) sued Carlos Lopez-Aguiar (seller) in a Florida trial court for breach of an express warranty.
- Lopez-Aguiar moved for summary judgment, arguing the warranty was extinguished by the doctrine of merger and waived by the purchaser.
- The trial court granted summary judgment in favor of the seller, Lopez-Aguiar.
- American National Self Storage, Inc., as the appellant, appealed the summary judgment to the District Court of Appeal of Florida, Third District.
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Issue:
Does the doctrine of merger extinguish a seller's express warranty in a real estate sales contract regarding the availability of utilities at the property line when that warranty is not included in the final deed?
Opinions:
Majority - Judge Daniel S. Pearson
No. The doctrine of merger does not extinguish covenants in a sales contract that are collateral to the conveyance of title, such as a warranty regarding the availability of utilities, because such provisions are not performed or satisfied by the mere execution and delivery of the deed. The court reasoned that the merger rule generally applies only to provisions concerning title, encumbrances, or other matters typically included in a deed. Agreements that are collateral, calling for acts by the seller that go beyond merely conveying good title—like ensuring utility access or the working condition of systems—are considered independent covenants that survive the closing. The warranty for utility availability is such a collateral agreement, and therefore it was not merged into the deed and remains enforceable.
Analysis:
This decision reinforces the 'collateral agreement' exception to the merger doctrine in real estate law, protecting buyers from losing the benefit of specific contractual warranties simply by accepting a deed. It clarifies the distinction between covenants related to title, which merge into the deed, and covenants related to the property's physical condition or infrastructure, which survive closing. The ruling ensures that sellers remain accountable for specific, independent promises made during negotiations, even if those promises are not reiterated in the final conveyance document. This precedent gives buyers confidence that they can enforce such warranties post-closing without having to renegotiate the terms of the deed itself.
