Appellate Court Vacates $1.9 Million Judgment in Complex Hotel Sale Dispute

Brannock Berman & Seider secured a major appellate victory in Florida’s First District Court of Appeal on behalf of a commercial real-estate investor, reversing a final judgment that had awarded a $1.9 million escrow deposit to the proposed purchaser in a failed $36.25 million sale of the Embassy Suites in Destin.

The dispute arose after the sale collapsed in March 2020 amid the onset of COVID-19. When the buyer failed to fund a required defeasance deposit and instead declared default based on alleged deficiencies in financial disclosures from the investor/seller, the seller terminated the agreement and sought release of the escrowed funds. After a bench trial, the court ruled against the seller, finding alleged prior breaches tied to financial reporting and loan-related representations.

On appeal, Brannock Berman & Seider convinced the First District that the trial court’s ruling rested on a fundamental misreading of the purchase agreement. The First District held that the seller did not breach any of the provisions relied upon by the trial court. Critically, the appellate court rejected the argument that the seller had an ongoing obligation to provide real-time or operational financial updates during the rapidly changing COVID-19 environment.

Instead, applying a strict textual analysis, the court held that the agreement’s defined term “Financial Statements” was limited to historical income and expense statements for specified periods—and did not require continuous disclosure of new financial data. The appellate court further concluded that a request by the seller for loan forbearance did not constitute an impermissible “arrangement with creditors,” as the trial court had ruled.

By vacating the judgment and remanding for the trial court to determine whether the buyer, not the seller, breached the agreement, the decision restores the seller’s claim to the $1.9 million deposit and reorients the case around the buyer’s failure to perform—a complete flip of the original outcome.