Medical Facilities Development, Inc. v. Little Arch Creek Properties, Inc.

Medical Facilities Development, Inc. (Medical Facilities) (plaintiff) submitted a $5.5 million offer to purchase an office building from Little Arch Creek Properties (Little Arch) (defendant). The sale did not go through. Subsequently, Little Arch entered into a $6.5 million purchase contract with a third-party. Medical Facilities sued Little Arch for specific performance, arguing that the correspondence between Medical Facilities and Little Arch constituted a purchase contract. Medical Facilities also filed a notice of lis pendens, which prevented Little Arch from closing on the third-party purchase contract. The trial court ordered Medical Facilities to post a $1 million lis pendens bond to protect Little Arch in the event Medical Facilities’ lis pendens proved to be unjustified. Medical Facilities appealed the bond order. The appellate court affirmed, holding that a lis pendens bond was a mandatory accompaniment to Medical Facilities’ lis pendens. Medical Facilities appealed to the Florida Supreme Court, arguing that it was overly burdensome to require a lis pendens bond unless the underlying lawsuit was based on a duly recorded instrument or a construction lien, which Medical Facilities’ lawsuit was not. Little Arch countered, arguing that courts should have discretion to order the lis pendens filer to post a bond if the property-holder is likely to suffer damages or loss if the lis pendens proves unjustified.