Arko Enterprises, Inc. v. Wood

Arko Enterprises, Inc. (Arko) (defendant), a landowner, entered into a contract with Jackson (defendant) for the purchase of Arko’s land. The contract required Arko to subdivide the land into residential lots and to make improvements to the land. Jackson paid Arko part of the purchase price upon the contract’s execution and agreed to pay the balance after Arko’s completion of the improvements. Jackson entered into the contract as either a trustee for John T. Wood and E.L. Coleman (plaintiffs) or as a party to a joint venture with Wood and Coleman. Prior to Arko’s compliance with its contractual obligations, the City of Cocoa acquired the land by eminent domain. Arko remained the record landowner, defended the condemnation proceeding, and received the jury’s condemnation award. Jackson did not appear at the proceeding, though he was named as a co-defendant. Wood and Coleman sought a declaration of their rights under the contract, an accounting, and Arko’s reimbursement for the amount paid at the contract’s execution. Arko filed a counterclaim against Wood and Coleman, and a cross-claim against Jackson. Arko requested the property’s full purchase price, reduced by the condemnation award and the amount paid at the contract’s execution. The judge found in favor of Wood, Coleman, and Jackson. The judge also entered a summary final decree in favor of Wood and Coleman for the amount paid at the contract’s execution, with interest and court costs. On appeal, Arko claimed that the case should be decided based on the doctrine of equitable conversion, under which the property seller is not responsible for losses to the property after the signing of the purchase contract.