In Bruno v. Mona Lisa at Celebration, LLC (In re Mona Lisa at Celebration, LLC), Case No. 6:09-bk-458, Adv.Proc. No. 6:09-ap-49 (Bankr.M.D.Fla. May 16, 2012) numerous prospective purchasers of units in a hotel-condominium made deposits but, after the Florida condominium market collapsed, did not go through with their purchases and demanded return of their deposits even though the project was constructed as promised (“The likely reason the plaintiffs rely on these conclusory statements is that they cannot demonstrate any actual damages because, by and large, Mona Lisa did everything it promised.”). Pursuant to section 718.202, Florida Statutes, Mona Lisa posted a bond to allow it to use the first 10% of the prospective purchasers’ deposits. Many of the plaintiffs had deposited more than 10%, and the Act permitted the developer to use such excess deposits for construction and development, but not for advertising. The court found several technical violations, including that the over 10% deposits were transferred to an operating account and commingled with other funds and that some advertising expenses (rent on the sales office) were paid from the commingled account. The court held that the developer owed the plaintiffs their deposits plus interest, costs and attorneys’ fees. It held that the surety was responsible for the deposits, up to the penal sum of the bond, but not the other items. The court rejected the surety’s argument that the bond covered only the first 10% of the deposits because the bond itself was conditioned on refund of deposits, not just the first 10%. (from RPPTL Subcommittee).
Trenton H. Cotney
Florida Bar Certified Construction Lawyer
Trent Cotney, P.A.
1211 N Franklin St
Tampa, FL 33602