Case of the TBD Escrow Agent

ORLANDO, Fla. — A trial court and appellate court disagreed about what to do with a late escrow deposit and a contract that listed the escrow agent as “TBD”.

Here’s an interesting case involving the Florida Realtors®/Florida Bar “AS IS” Contract for Purchase and Sale. It’s a 2024 case from the First District Court of Appeal in Florida, and it was between Linda O’Donnell as appellant and James E. Lee, II, and Paige J. Lee as appellees.

This case summary and discussion will be just a brief overview, enough to make a few observations. There’s always more to a case, and parties who lived through the conversations, hearings, trial, and beyond would have plenty to add. This case, for example, took about four and a half years to get from contract execution to the final ruling. For our purposes, we’ll just hit the highlights and see if there are any practical takeaways.

Here’s a summary of key facts from the appellate court decision:

• On 4/19/2021, the Seller (the Lees) and the Buyer (O’Donnell) executed a Florida Realtors/Florida Bar “AS IS” Contract for Purchase and Sale contract.
• The purchase price was $1,450,000, and the initial deposit was $10,000, due within three days after execution. The property was a rental, so it was generating rental income for the seller.
• The contract stated the funds would be delivered to an escrow agent “TBD by seller.”
• On 4/22/2021, after learning that their reason to sell (expensive medical bills) was no longer as pressing, since insurance would cover many of the bills, the seller prepared a letter that included the following statements: “Please consider this correspondence formal notice of termination of the proposed contract...This proposed deal will not close...we wish to inform all parties now so they may pursue other opportunities.” A picture of the termination letter was distributed and made its way to the buyer that same day.
• The termination didn’t mention the failure to make the initial deposit. During the trial, James Lee said “I didn’t think that was necessary and I didn’t want to ruffle Ms. O’Donnell’s feathers because my full expectation was that she was going to buy another house, so I didn’t want to say...you breached.”
• On 4/23/2021, the buyer wired the $10,000 initial deposit to a local law firm. The seller didn’t designate the law firm as escrow agent, and there’s no record of the seller ever designating an escrow agent throughout the process.
• On 4/29/2021, the buyer’s attorney sent the first demand letter, asking the seller to retract the 4/22/2021 demand letter and “close on the contract according to its terms.”
• On 5/6/2021, the buyer’s attorney sent a second demand letter, demanding the seller “honor the contract and close according to its terms.”
• On 5/17/2021, the buyer filed a complaint for specific performance asking the trial court to direct the seller “to perform the Contract and to award...reasonable attorney fees.”
• The seller answered and raised an affirmative defense that the buyer had “failed to pay the deposit required by the contract by the deadline...”
• On 12/9/2021, the trial court had a one-day bench trial where the buyer asserted the seller breached their contractual obligation to identify an escrow agent. The seller asserted that, due to the time is of the essence clause in the contract, the buyer’s failure to place the funds in escrow was a material breach of the contract.
• On 12/22/2021, the trial court denied the buyer’s request for specific performance because she “failed to comply with her contractual obligation to pay the initial deposit required by the contract by the deadline required by the contract.”

That’s it for the trial court. The buyer lost for failing to make the deposit in time. But that’s not the end of the story. The buyer appealed to the First District Court of Appeal, and here’s what the 1stDCA ruled on 4/24/2024.

• The buyer raised three essential arguments on appeal, while the seller raised three essential arguments and three sub-arguments.
• Upon reviewing the record from the trial court, the appellate court focused on a few admissions by the seller, under oath:
  • Identification of an escrow agent was a material term of the contract;
  • They alone were responsible for identifying an escrow agent; and
  • They failed to identify an escrow agent

With that in mind, the appellate court determined that, by their own admission, the seller committed a material breach of the contract.

The 1st DCA concluded that the trial court erred in finding the buyer committed a material breach and that the seller was actually the party that committed a material breach. They sent it back to the trial court to determine the appropriate remedy for the seller’s breach.

That leaves just one more stop to get to the end of this saga.

On 9/11/2025, the trial court issued a final judgment after remand to determine the appropriate remedy. Here’s the final outcome: The buyer was granted her request for specific performance, so the seller was obligated to convey the property to the buyer, and the buyer was entitled to have the seller pay her attorney’s fees and costs in the amount of $42,532.50.

What practical takeaways can we glean from this case?

First, outcomes in court can be unpredictable. While appellate courts most often affirm the trial court’s ruling, a 2025 article in the Florida Bar looked at every opinion for the 3rd and 4th DCA and calculated a “reversal rate” (reversal, reversal in part, grant of a petition) of 19.9% and 19.7%, respectively. This means that one in five appellants gets some sort of relief from a trial court’s order.

And how many cases that are filed get the chance to appeal? I couldn’t find a reliable source to give an estimate, but it’s likely very small and in the low single digit range, percentage-wise. When you factor in that most cases settle without even getting to a final trial court order, it’s extremely low indeed.

The cost to get there is high, both in actual dollars spent and time. How many people have the persistence of this buyer, to hang in there for four and a half years, spending tens of thousands of dollars, a little at a time along the way?

Granted, most cases settle or resolve themselves in a much shorter period of time. But the takeaway is that there can be uncertainty, cost, and toil along the way.

Second, even small deviations from just filling in the blanks can make future court cases much more unpredictable than they would be if each blank is meticulously filled out with the information requested.

Here, for example, if the name and contact information of the escrow agent was in the blank, as the form directs, absent any additional facts, it would have been a simple case. The buyer had three calendar days to make the Deposit, which would have been 4/22/2021 (a Thursday). Since the buyer made it on 4/23/2021, it would have been too late since, as the seller’s attorneys argued, time is of the essence in this contract.

But the “TBD” at the center of the case gave both parties room to make arguments. While the seller won at trial court, the buyer won on appeal. And from what I could tell, attorneys for both sides did a good job representing their clients.

While we’re on that topic of straying beyond filling in the blanks, every day I pick up the phones and talk with members on the Florida Realtors Legal Hotline, I’ll hear about a clause the buyer or seller wrote themselves and inserted in the additional terms or in a blank addendum, without the assistance or review of a lawyer. If it’s just a proposed term, I usually think and say it’s a little thin on detail. If someone calls about one of these clauses and the parties are fighting over some aspect of it, I usually say it’s a jump ball, because I can immediately think of some decent arguments on both sides of the debate (due to the lack of detail).

Third, and finally, on the Florida Realtors Legal Hotline, we hear from a lot of people who want an easy answer. If someone called and gave these facts (usually a much shorter version, and only from one side’s perspective), they may want to know who’s right and who’s wrong.

That can be a hard question to answer. Do you mean who has the higher chance of succeeding in court, in my opinion? The thing that’s usually running through my mind is a list of questions that are equally or more important than a few basic facts. What’s the amount in controversy? What’s the other side’s argument right now? Have either of the parties consulted a lawyer (or are represented by one)? Are there any important facts or statements that might change the few facts I’ve heard so far? Do they have the resources and tenacity to force the issue if it can’t be resolved by talking it out? What court are they heading to next, and who is the judge and attorney or law firm for each side?

That said, I have heard this specific question before, and I usually think, if pressed, that it would seem hard to hold a buyer liable for making a deposit when there’s no indication where it should go. But there’s a cloud over that answer, since the contract also says there’s a deadline that wasn’t met.

As often as members are open to a different type of conversation, it seems like a better question would be what might a conservative next step look like for a buyer? If that were the question, and if there was still time to make the deposit, it does seem like putting the money in escrow somewhere before the deadline and reaching out to the seller to try and amend the contract for clarity on where it needs to go would have been a conservative next step.

Joel Maxson is Associate General Counsel

Note: Information deemed accurate on date of publication

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