Third District Court of Appeal State of Florida
Opinion filed April 8, 2026. Not final until disposition of timely filed motion for rehearing.
________________
No. 2D24-1279 Lower Tribunal No. 21-CA-189-P ________________
Bal Harbour Shops Marketplace, LLC, Appellant,
vs.
ORU Associates, Inc., Appellee.
An Appeal from the Circuit Court for Monroe County, Luis Garcia, Judge.
Gunster, Yoakly & Stewart, P.A., and Simon M. Lassel, and H. Eugene Lindsey, III, for appellant.
Rumberger, Kirk & Caldwell, P.A., and David B. Shelton (Orlando), and Robert V. Fitzsimmons, for appellee.
Before FERNANDEZ, MILLER and BOKOR, JJ.
FERNANDEZ, J. Bal Harbour Shops Marketplace, LLC (“Bal Harbour”) appeals the trial
court’s final judgment entered against it and in favor of ORU Associates, Inc.
(“ORU”) following a bench trial, as well as the denial of Bal Harbour’s motion
for rehearing and/or reconsideration, and/or to alter or amend the final
judgment. For the reasons that follow, we reverse.
BACKGROUND
Bal Harbour and ORU executed a commercial lease in December 2020
(“the Lease”). The leased premises was the first floor of a building in Ocean
Reef, Monroe County, which Bal Harbour, the tenant, accepted in “as is”
condition. The “term” of the Lease is governed by section 2.1, and provides:
Section 2.1. Term. The term of this Lease (“Term”) shall begin on the Effective Date (also, the “Lease Commencement Date”), and end on 4/30/2021 (“Lease Expiration Date”), subject to Section 2.2. Notwithstanding anything contained in this Lease to the contrary, during the initial term of this Lease [Bal Harbour] shall have the right, for any or no reason, to terminate this Lease on thirty (30) days’ notice to [ORU]. Said right expires on April 30, 2021 whether or not [Bal Harbour] exercises the option to Extend provided in Section 2.2 below.
(emphasis in original). Section 2.2 provided that Bal Harbour had the right to
extend the Lease to April 30, 2030. Further, if Bal Harbour extended the
Lease, it had the right to remodel the leased premises, and the rent would
2 be abated during remodeling for up to six months or upon Bal Harbour’s “re-
opening for business in the leased premises,” whichever comes earlier.
Article III of the Lease addressed Bal Harbour’s obligations to pay rent
and provided that it does not have to pay rent until the initial work is
substantially completed, and Bal Harbour opens for business:
Section 3.1. “Base Rent”. The parties agree that, commencing as of the date on which [Bal Harbour] has substantially completed [Bal Harbour’s] Initial Work and opened for business in the leased premises (the “Rent Commencement Date”), Base Rent in the amount of $22,000 per month, adjusted annually if the Option to Extend is exercised . . . plus Florida Sales Tax shall be payable in monthly installments.
....
Section 3.4. Initial Payment of “Base Rent”. Notwithstanding anything to the contrary contained in this Lease, nor to the status of [Bal Harbour’s] improvements, if any, to the leased premises, [Bal Harbour] shall pay to [ORU], on or before Lease Commencement Date, the first monthly installment of “Base Rent”.
In addition, paragraph 4.1 of the Lease required Bal Harbour to pay the
security deposit when the Lease was executed, and ORU could use the
security deposit if Bal Harbour defaulted under the Lease. Furthermore,
section 4.4 provided:
Section 4.4. Refund of Security Deposit. If [Bal Harbour] shall fully and faithfully comply with all of the
3 terms, provisions, covenants and conditions of this Lease, the security deposit shall be returned to [Bal Harbour], without interest, within the time required by law, and after delivery of entire possession of the leased premises to [Bal Harbour].
Article V addressed the use of the leased premises, alterations, and
improvements and stated the following:
Section 5.1. Use of leased premises. [Bal Harbour] shall use and occupy the leased premises for the operation of any extension of the “Bal Harbour Shops Marketplace,” including the right to display and sale, at retail, goods, and any related purpose, including various popup uses, trunk shows, and other marketplace activities as determined by [Bal Harbour], and/or . . . any other lawful use related in any way to “Bal Harbour Shops” and/or any of its tenants (the “Permitted Use”) and for no other use or purpose[.]
Section 5.3. Alterations. Except for the initial cosmetic renovations (including without limitations, installation of FFE [furniture, fixture, and equipment] and changes to floors, lights and painting), [Bal Harbour] shall not make any alterations in or to the leased premises without first obtaining the written approval and consent from [ORU], which approval and consent may not be unreasonably delayed, conditioned, or withheld.
Section 5.5. Improvements. [Bal Harbour] shall cause any of the proposed improvements (collectively, the “Improvements”) set forth on the proposed “Plans” to be constructed on the leased premises in accordance with construction plans and specifications covering the proposed Improvements (collectively, the “Plans”) and ORCA Rules. . . .
4 Section 8.2 provided that the following acts, among others, by Bal
Harbour constituted an “event of default”:
(i) If [Bal Harbour] fails to pay any installment of rental or other monetary obligation hereunder, within ten (10) days following written notice of past due.
(ii) If [Bal Harbour] breaches any of the other conditions, stipulations or covenants contained herein, and if such breach of condition shall condition for a period of thirty (30) days after [Bal Harbour’s] receipt of written notice thereof from [ORU]; or, if such default is of a nature which cannot be cured with such 30-day period, [Bal Harbour] fails to commence connecting such default within such 30-day period and to diligently continue to correct the same until such default if fully cured[.]
The Lease also provided in section 13.7 that “[t]ime is of the essence,” and
section 13.8 provided that the “[l]ease contains the entire agreement
between the parties.”
On March 12, 2021, Bal Harbour provided notice to ORU that it was
terminating the Lease, stating, “As the Rent Commencement Date did not
occur, we would ask that you return the initial rent payment and security
deposit in the collective amount of $45,540.” Bal Harbour explained that due
to permitting issues, it was unable to open for business. After ORU refused
to return the funds, Bal Harbour initiated the underlying breach of contract
action against ORU, attaching the Lease to its complaint.
5 ORU then filed its answer denying material allegations, affirmative
defenses, and a counterclaim, asserting Bal Harbour breached the Lease. In
its counterclaim, ORU asserted Bal Harbour accepted the leased premises
“as is” and was obligated to complete cosmetic repairs and open for business
in a timely manner. It alleged Bal Harbour, however, breached the Lease
because it failed to accept the premises “as is,” and instead, demanded that
renovations be made to the leased premises. ORU demanded payment of
the balance due on the Lease.
Bal Harbour then filed its reply to ORU’s affirmative defenses and an
answer and affirmative defenses to ORU’s counterclaim. Bal Harbour
asserted that the “Rent Commencement Date” did not occur, and it was
therefore entitled to the return of its first month’s rent and security deposit
paid to ORU.
In April 2023, the parties filed an amended pre-trial stipulation. The
stipulation provided that “[Bal Harbour] seeks the return of prepaid rent and
Security Deposit following the proper termination of the Lease prior to the
rent commencement date. [ORU] seeks rent owed by [Bal Harbour] for its
occupation of the Premises.” Thereafter, the parties set forth several
admitted facts, including that “[Bal Harbour] intended to operate a physical
retail ‘pop up’ of its online Bal Harbour Shops Marketplace within the
6 Premises during Phase 1 and a permanent store in Phase 2 if the pop-up
was successful.” Further, prior to executing the Lease, Bal Harbour told ORU
its initial cosmetic renovation plans included installation of furniture, fixtures,
and equipment and changes to the floor, lights, and painting. Moreover, Bal
Harbour contracted with a consultant to assist in all phases of the permitting
process, a designer, and a general contractor. After the Lease was executed,
Bal Harbour paid ORU the first month’s base rent of $22,000 under section
3.4 of the Lease and the security deposit of $23,540 under section 4.1 of the
Lease. Finally, on March 12, 2021, Bal Harbour provided ORU with thirty-
days’ notice of termination of the Lease, demanding the return of the prepaid
rent and security deposit.
In the stipulation, the parties also set forth the following two issues of
fact that remained to be litigated:
1. Whether [ORU] breached the Lease when [ORU] failed to return the prepaid rent and the Security Deposit to [Bal Harbour] following [Bal Harbour’s] termination of the Lease on March 12, 2021.
2. Whether [] [Bal Harbour] breached its implied covenant of good faith by attempting to perform more than the initial cosmetic improvements that would allow it to open quickly, as contemplated by the parties to the Lease, resulting in the improper denial of rent due to [ORU].
The case proceeded to a half-day bench trial. At the hearing, the trial
7 court heard testimony from Bal Harbour’s corporate representative, Matthew
Lazenby (“Lazenby”), and ORU’s corporate representative, Russ Chinnici
(“Chinnici”), during which the Lease and several emails, including emails
before the execution of the Lease, were addressed.
Lazenby testified to the following: Bal Harbour Marketplace “was an
attempt to bring together all of our luxury brands under one roof.” The
purpose of the short-term Lease was to open pop-ups during the peak
season at Ocean Reef Club, which coincided with the term of the Lease. Bal
Harbour did not try to avoid opening for business. Rather, it expended a lot
of time, effort, and resources attempting to get the premises open, including
reducing the scope of work. Bal Harbour contracted with an architect, general
contractor, and a permit expediter before entering the premises. Further,
there was never the possibility that upon executing the Lease, it could
immediately enter the premises and start selling products because “the types
of spaces that [its] luxury tenants are used to operating in are Class A plus
retail that they spend millions of dollars to . . . put their luxury image in front
of their customers,” and the leased premises was “probably less than Class
B office.” One of the emails before the execution of the Lease referred to
“heavy cosmetic remodel,” which was consistent with Bal Harbour’s
expectations, and redoing the floors, ceiling, and lighting was contemplated
8 and discussed.
Bal Harbour submitted two sets of permits to Monroe County—one that
contemplated the immediate cosmetic remodel and a second that
contemplated the remodel if Bal Harbour opted to extend the Lease. ORU
never objected to the plans that it saw. In addition, a landlord needs to sign
a Monroe County permit application, and Chinnici (ORU’s representative)
approved the permits sent to Monroe County.
Lazenby further testified that there was a clerical problem with the
submission reviewed by the fire department. The submission incorrectly
showed fire sprinklers, and the submission was subsequently corrected to
reflect a fire alert system rather than sprinklers. An issue then arose when
the fire marshal realized that the building had fallen out of compliance with
the fire codes, and the Fire Marshal wanted to discuss the issue with the
building owner to determine how the building could be brought back into
compliance.
The Phase 1 permit was approved on March 11, 2021. Bal Harbour,
however, decided to not commence the Phase 1 initial work and to terminate
the lease based on the experience it had until then in trying to get permits.
On March 12, 2021, Bal Harbour notified ORU it was terminating the Lease
and requested the return of its rent and security deposit.
9 On cross-examination, Lazenby testified that the work contemplated in
the initial work was described by him to Chinnici as “heavy cosmetic
remodel,” which would have included painting, replacing ceiling, flooring, and
lighting, and mechanical back of the premises. The work required a permit.
Lazenby also testified that Bal Harbour did not learn about the fire code
violation until after it had signed the Lease; and later, his understanding was
that the premises could not have been occupied until the issue was resolved
with the Fire Marshal.
Moreover, in negotiating the Lease with ORU (Chinnici), Bal Harbour
represented it would do the “absolute minimum necessary to open.” Bal
Harbour’s staff was then instructed to do the “absolute minimum necessary”
so that Bal Harbour’s tenants would be willing to operate from the space,
which would include painting, installing floor tiles, acoustical ceiling tiles, and
lighting acceptable to tenants, having a functional HVAC, and ascertaining
that the building complied with fire codes.
Lazenby acknowledged that Bal Harbour did not immediately pursue a
permit for these initial renovations when the Lease was signed because Bal
Harbour has very “demanding tenants,” who spend millions on store
buildouts. Bal Harbour “kept trying to find ways to make it suitable and
expedite the timeline but, eventually, we ran out of time and had to terminate
10 the lease.”
On re-direct, Lazenby testified that the Lease did not provide that Bal
Harbour open for business without conducting any work on the property.
Rather, the property “was offered in as-in condition with the express
understanding [Bal Harbour] would be improving it.” In addition, his
understanding was that the Fire Marshal would only approve the permit for
the initial cosmetic plans after ORU entered into an agreement to install the
sprinklers. Thereafter, ORU met with the Fire Marshal in March 2021, and
they worked out an agreement. Everyone was also working towards opening
as soon as possible. Bal Harbour heard nothing but praise from ORU, and
at no point was there communication from ORU that Bal Harbour was going
beyond its scope of work until after the “dispute became a topic of
conversation.”
Bal Harbour rested. ORU moved for an involuntary dismissal arguing
that Bal Harbour admitted that the absolute minimum required was to paint,
change the floor, and “a permit that they leave all the MEP and fire
suppression system and fire alert system in place.” That work would have
taken two to three weeks, and they acknowledged they did not do the
absolute minimum necessary, which would have allowed them to open by
January 15, 2021, as Bal Harbour advertised.
11 In response, Bal Harbour argued that the Lease has an integration
clause that states the parties do not rely on any promises made prior to
executing “[s]o this idea that [Bal Harbour] is in any way beholden to do the
minimal possible, and that it somehow breached an oral agreement, is not
supported in any way by law or facts.”
Then, relying on Insurance Concepts & Design, Inc. v. Healthplan
Services, Inc., 785 So. 2d 1232, 1234 (Fla. 4th DCA 2001), ORU argued that
under Florida law, “there is a covenant of good faith and fair dealing intended
to protect the reasonable expectations of the contracting parties in light of
their express agreement.” ORU asserted Bal Harbour promised to do the
absolute necessary to open as quickly as possible, but it did not do so.
Instead, Bal Harbour’s contractor in mid-January had to tell Bal Harbour that
it needed to have a simpler plan if they wanted to open, and that simple plan
would have been acceptable to Bal Harbour’s tenants.
Bal Harbour’s counsel then argued in part that it did no intentional act
to avoid opening or occupying the leased premises. The trial court informed
the parties that matter was for the trier of fact to resolve. The trial court then
denied ORU’s motion.
Next, ORU called its president, Russ Chinnici, as a witness. He
testified to the following: his understanding was that Bal Harbour would
12 attempt to perform work that did not require permits, but “[i]t morphed from
taking the space and doing simple pop-ups into a very exotic Bal Harbour
experience[.]” But Chinnici never objected because he testified “[i]t would not
be in [his] self-interest to object to that.” He did, however, expect Bal Harbour
to pay rent from day one of the Lease. Chinnici explained that after receiving
the first month’s rent, he was trying to figure out how to treat the payment,
for example, “should [he] prorate” the payment. He was then trying to
communicate with Bal Harbour, “[S]o I said, you know what, let me just give
them December free. Let’s get the ball rolling and move on.” Therefore, he
applied the $23,540 to January’s rent. He then invoiced Bal Harbour for
February’s rent, but Bal Harbour did not pay February, March, or April’s rent.
Chinnici added that the moment Bal Harbour received the keys, it opened
because it is in the business of subletting space, and Bal Harbour was
already talking to clients.
On cross-examination, Chinnici testified that after ORU invoiced Bal
Harbour for rent, Bal Harbour responded for clarification, stating: “Per
Section 3.1. Base Rate: ‘Rent Commencement Date’ is defined as due upon
opening, which is TBD right now. I reached out to my Const. Dept for an
Anticipated Date.” On February 2, 2021, ORU responded, stating: “To
confirm, we have your first month’s rent and security deposit. . . . I will stand
13 by and wait for you to open to commence rent.” Chinnici testified that he
responded in that manner because he was “try[ing] to save the deal because
[he] saw there was complications going on. So in [his] best interest, it was
best to cooperate instead of blowing up the whole program and not having a
potential tenant.” However, he considered the leased premises already open
because “[Bal Harbour is] in business subletting space,” and Bal Harbour
already had customers going in and picking which space they wanted.
Chinnici further testified that Bal Harbour did the initial work because “[Bal
Harbour] poked around the ceilings. [Bal Harbour] said, ‘All right, guys, we
know what we got to do here, marshal our resources and put plans together
and let’s get going.’ So they were in business.”
Based on the trial court’s questioning, ORU testified that its current
tenant of the premises has the same fire system that was present in January
2021. The trial court requested that the parties submit written closing
arguments and proposed final judgments, which the parties did.
The trial court entered a final judgment for ORU. The trial court found,
among other things, that the Lease provided a term commencing upon
execution until April 30, 2021. When the premises was delivered to Bal
Harbour, it was in code compliance and ready to be occupied. The Lease
also allowed Bal Harbour to extend the Lease to April 30, 2030, and if
14 extended, Bal Harbour would be granted up to a six-month rent abatement
to complete the extensive renovations. Under the Lease, Bal Harbour paid
the first month’s rent and security deposit.
The trial court found that the Lease provided that the rent obligation
would not commence until Bal Harbour substantially completed its “Initial
Work” and opened for business. Importantly, the trial court determined that
Bal Harbour opened for business upon execution of the Lease on December
14, 2020, explaining, “[Tenant] is a commercial landlord, which intended to
sublease portion of the leased premises to commercial tenants and had
commenced negotiations with potential subtenants commencing prior to and
after execution of the lease.” The court further found that the term “Initial
Work” is not defined in the Lease, but the parties “entered into an express
agreement that the ‘Initial Work’ would be limited to what was ‘absolutely
necessary’ in order to open for the season at Ocean Reef.” Later, Bal
Harbour decided that the “absolutely necessary” “Initial Work” would be
limited to “paint, install time, and repair acoustical ceiling tile as needed.” Bal
Harbour advertised in the Ocean Reef community that it would open on
January 15, 2021.
The trial court also found that “[Tenant] did not attempt to substantially
complete the Initial Work, but immediately focused on the design and
15 implementation of the more extensive renovations contemplated in the event
the Lease extension option was exercised.” After Bal Harbour’s general
contractor advised it that the extensive plans would not allow it to open
quickly, it was then that Bal Harbour “pursued simple plans for the Initial
Work.” Bal Harbour did not request the plans for the Initial Work from its
architect until January 15, 2021, a month after it executed the Lease. Bal
Harbour submitted separate permit applications—(1) plans for the Initial
Work and (2) plans for the extensive renovation contemplated if Bal Harbour
opted to extend the Lease. The Monroe County Building Department and
Fire Marshal reviewed the separate plans simultaneously, resulting in
extensive delays in the permitting process.
The trial court stated that ORU claimed that after Bal Habour vacated
the premises, ORU incurred expenses in repairing the premises in the
amount of $8,111.00.
In its conclusions of law section, the trial court stated that “Florida
contract law recognizes the implied covenant of good faith and fair dealing
in every contract,” which is to “protect ‘the reasonable expectations of the
contracting parties in light of the express agreement.’” The court also
concluded:
Bal Harbour entered into an express agreement with ORU that it would do the minimum work necessary,
16 open and commence rent quickly. [Bal Harbour] breached in [sic] implied covenant of good faith and fair dealing by failing to timely act in furtherance of its express agreement with ORU to perform the absolute minimum improvements necessary and open, which would initiate its obligation to pay rent to ORU under the Lease.
As to damages, the trial court found that the rent obligation
commenced three months before Bal Harbour’s termination of the Lease.
ORU had been paid one month’s rent and the security deposit in the amount
of one month’s rent. Therefore, Bal Harbour still owed ORU rent in the
amount of $23,540. However, ORU failed to prove that it incurred damages
that exceeded normal wear and tear, and it also failed to provide any
supporting receipts in support of the amount claimed. The trial court thus
awarded damages of $23,540 to ORU. The court also found ORU was the
prevailing party, and thus, was entitled to attorney’s fees, costs, and interest.
Thereafter, the trial court denied Bal Harbour’s motion for rehearing and/or
reconsideration, and/or to alter or amend the judgment. Bal Harbour now
appeals
ANALYSIS
“The interpretation of a lease agreement is a question of law and the
applicable standard of review is de novo.” 4350 NW 8 Terrace, LLC v. Com.
Laundries, Inc., 411 So. 3d 572, 576 (Fla. 3d DCA 2025) (quoting Covelli
17 Fam., L.P. v. ABG5, L.L.C., 977 So. 2d 749, 752 (Fla. 4th DCA 2008)).
“Further, ‘when the language [in a contract] is clear and unambiguous, it must
be construed to mean “just what the language therein implies and nothing
more.”’” Dezer Intracoastal Mall, LLC v. Seahorse Grill, LLC, 277 So. 3d 187,
190 (Fla. 3d DCA 2019) (quoting Walgreen Co. v. Habitat Dev. Corp., 655
So. 2d 164, 165 (Fla. 3d DCA 1995)). But, “if a contract is ambiguous, the
court must construe it pursuant to the parties’ intent.” Charbonier Food
Servs., LLC v. 121 Alhambra Tower, LLC, 206 So. 3d 755, 758 (Fla. 3d DCA
2016). Finally, following a bench trial, the trial court’s findings of fact will not
be disturbed on appeal if supported by competent, substantial evidence.
Parque Towers Devs., LLC v. Pilac Mgmt., Ltd., 395 So. 3d 189, 191 (Fla.
3d DCA 2024).
A. Rent Commencement Date in Lease
Bal Harbour argues that under the express terms of the Lease, which
are unambiguous, the “rent commencement date” had not commenced
because it had not (1) substantially completed the “initial work,” and (2)
opened for business in the leased premises. We agree with this position.
Here, numerous emails were sent before the execution of the Lease,
which were introduced into evidence and addressed. Even so, as the
provisions in the Lease are clear and unambiguous, the trial court was
18 required to construe the Lease based solely on the unambiguous provisions
of the Lease. In addition, section 13.8 of the Lease provides that the “Lease
contains the entire agreement between the parties.”
Section 3.1 of the Lease, titled “Base Rent,” defines the “Rent
Commencement Date” as the date when “[Bal Harbour] has substantially
completed [Bal Harbour’s] Initial Work and opened for business in the leased
premises.” The trial court stated in the final judgment that the Lease does
not define the term of “Initial Work.” However, Section 5.3 of the Lease
specifically sets forth the work anticipated during the initial phase of the
cosmetic renovations to the leased premises:
Section 5.3. Alterations. Except for the initial cosmetic renovations (including without limitations, installation of FFE [furniture, fixture, and equipment] and changes to floors, lights and painting), [Bal Harbour] shall not make any alterations in or to the leased premises without first obtaining the written approval and consent from [ORU], which approval and consent may not be unreasonably delayed, conditioned, or withheld.
(emphasis added). Thus, Bal Harbour’s initial work could include any
cosmetic renovations. Accordingly, the trial court’s definition of “Initial Work”
was not consistent with the Lease provision in section 5.3. Rather, the trial
court’s definition of “Initial Work” was improperly based on pre-contracting
emails that provide that the initial work is to “be limited to what was
19 ‘absolutely necessary’ in order to open for the season at Ocean Reef.”
Admittedly, the plans submitted when filing the permit application for the
Phase 1 cosmetic renovations were simpler than what was permitted under
section 5.3 of the Lease. Nonetheless, the trial court erred by relying on the
emails when defining the term “Initial Work.”
The trial court also found that Bal Harbour “opened for business upon
execution of the lease on December 14, 2020.” In making this determination,
the trial court also found that Bal Harbour “is a commercial landlord, which
intended to sublease portion of the leased premises to commercial tenants
and had commenced negotiations with potential subtenants commencing
prior to and after execution of the lease.” The finding that Bal Harbour
opened for business upon execution of the Lease is not supported by
competent, substantial evidence, or by the Lease itself.
For example, Section 5.1 of the Lease provides that “[Bal Harbour]
shall use and occupy the leased premises for operations of an extension of
the ‘Bal Harbour Shops Marketplace’, including the right to display and sale,
at retail, goods, . . . including popup uses . . . .” That never occurred. Further,
the trial court’s construction of the Lease is at odds with the definition of “Rent
Commencement Date” in the Lease. In addition, the trial court’s construction
is contrary to the parties’ pre-trial stipulation, which provides that Bal Harbour
20 “intended to operate a physical retail ‘pop up’ of its online Bal Harbour Shops
Marketplace with the Premises during Phase 1 and a permanent store in
Phase 2 if the pop-up was successful.” A pop-up store, either temporary or
permanent, did not open in the leased premises. Thus, the trial court’s finding
that Bal Harbour “opened for business” is not supported by competent,
substantial evidence, the terms of the Lease, or joint pre-trial stipulation.
B. Application of Implied Covenant of Good Faith and Fair Dealing
Bal Harbour also argues the trial court erred by finding that it breached
an implied covenant of good faith and fair dealing. Bal Harbour is correct.
“Florida contract law does recognize an implied covenant of good faith
and fair dealing in every contract[,]” which is “intended to protect the
reasonable expectations of the contracting parties in light of their express
agreement.” QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass’n, Inc., 94
So. 3d 541, 548 (Fla. 2012) (internal quotation marks and citations deleted).
“A duty of good faith must ‘relate to the performance of an express term of
the contract and is not an abstract and independent term of a contract which
may be asserted as a source of breach when all other terms have been
performed pursuant to the contract requirements.’” Id. at 548 (quoting Ins.
Concepts & Design, Inc., v. Healthplan Servs., Inc., 785 So. 2d at 1232, 1234
(Fla. 4th DCA 2001))
21 In its final judgment, the trial court concluded Bal Harbour breached its
implied covenant of good faith and fair dealing. In doing so, the trial court
stated:
Bal Harbour entered into an express agreement with ORU that it would do the minimum work necessary, open and commence rent quickly. [Bal Harbour] breached in [sic] implied covenant of good faith and fair dealing by failing to timely act in furtherance of its express agreement with ORU to perform the absolute minimum improvements necessary and open, which would initiate its obligation to pay rent to ORU under the Lease.
(emphasis added).
However, the record reflects that the Lease does not provide that Bal
Harbour would perform the “absolute minimum improvements necessary” to
open the leased premises. Thus, the trial court’s finding that Bal Harbour
breached its implied covenant of good faith and fair dealing was not based
on an express term of the parties’ Lease. Moreover, Bal Harbour did not
breach an express term of the Lease. Bal Harbour attempted to obtain
permits for the initial work, but there were delays in obtaining the permit.
Thereafter, Bal Harbour opted to terminate the Lease based on permitting
issues it experienced. Consequently, the trial court erred by finding that Bal
Harbour breached an implied covenant of good faith and fair dealing.
22 CONCLUSION
Based on the unambiguous terms of the Lease, the “Rent
Commencement Date” did not occur. The trial court’s final judgment was
based on findings that are not supported by either the Lease itself or by
competent, substantial evidence. Accordingly, we reverse the final judgment
entered against Bal Harbour and in favor of ORU, as well as the denial of Bal
Harbour’s motion for rehearing and/or reconsideration, and/or to alter or
amend the final judgment. We remand with instructions that final judgment
be entered in Bal Harbour’s favor on its claim for breach of the Lease against
ORU, with damages awarded to Bal Harbour in the amount of its pre-paid
rent ($22,000) and security deposit ($23,540), as well as a finding that Bal
Harbour is the prevailing party.
Reversed and remanded with instructions.