Eastern Federal v. State Office Supply

646 So. 2d 737, 1994 Fla. App. LEXIS 5715, 1994 WL 256961
CourtDistrict Court of Appeal of Florida
DecidedJune 14, 1994
Docket92-03782
StatusPublished
Cited by11 cases

This text of 646 So. 2d 737 (Eastern Federal v. State Office Supply) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eastern Federal v. State Office Supply, 646 So. 2d 737, 1994 Fla. App. LEXIS 5715, 1994 WL 256961 (Fla. Ct. App. 1994).

Opinion

646 So.2d 737 (1994)

EASTERN FEDERAL CORPORATION, Appellant,
v.
STATE OFFICE SUPPLY COMPANY, INC., Appellee.

No. 92-03782.

District Court of Appeal of Florida, First District.

June 14, 1994.
Rehearing Denied January 12, 1995.

*738 Sidney L. Matthew, of Gorman & Matthew, P.A., Tallahassee, for appellant.

Neil H. Butler, of Butler & Long, P.A., Tallahassee, for appellee.

BOOTH, Judge.

This cause is before us on appeal from a final order granting appellee State Office Supply, Inc. a permanent mandatory injunction against appellant Eastern Federal Corporation, and rejecting appellant's claim for damages against appellee. Appellant raises issues relating to the scope of the injunction and the rejection of its claim for damages. We affirm, as modified, the entry of the permanent mandatory injunction.

The relevant facts are that appellant is the owner of the Miracle Plaza Shopping Center on Thomasville Road in Tallahassee. In 1968, appellant entered into a lease with the Grand Union Company, which operated a Colonial Grocery Store on the site. The lease provided for a base rent of $1.60 per square foot plus one percent of all gross yearly sales in excess of $2,352,000. The lease had a term of 15 years and was renewable for an additional 15 years, and was thereafter renewable in two-year increments. The lease also contained a provision stating that Colonial could transfer and assign the lease or sublet the premises with the permission of appellant, "which permission shall not be unreasonably withheld."

Colonial's sales never triggered the percentage rent clause. In 1973, Colonial subleased the premises to appellee. Appellee was in the business of selling retail office furniture and supplies. By 1979, appellee had achieved 1.6 million dollars in yearly sales and had thus not triggered the percentage rent clause. In 1981, appellee filed for bankruptcy protection in a chapter 11 proceeding and emerged under a plan of reorganization *739 in 1982. Pursuant to the plan of reorganization, appellee assumed the unexpired sublease between it and Colonial, and in 1987, the bankruptcy case was closed.

During the pendency of the bankruptcy proceeding, appellant challenged whether appellee had any rights under the sublease between it and Colonial, and also contended that any future sublease had to be to a grocery store because a grocery store was the only type of tenant which could trigger application of the percentage rent clause. The bankruptcy court rejected these contentions, essentially holding that by consenting to the sublease between Colonial and appellee, appellant gave up the right to have the property used as a grocery store. These orders were affirmed by the United States District Court of the Northern District of Florida and the Eleventh Circuit Court of Appeals.

In January 1986, appellee subleased the premises to Farmer's Furniture Company under an agreement with appellant under which appellant was to receive a percentage of the difference between the base rent and the market rental, as compensation for the loss of the percentage rent clause. Farmer's Furniture vacated two years later. Appellee thereafter proposed Scott Tennyson Guitar Services, Inc., as a proposed subtenant, but appellant refused on the ground that this tenant was incapable of triggering the percentage rent clause at some reasonable future point.

Appellee filed a complaint in the Leon County Circuit Court seeking damages and injunctive relief, preventing appellant from withholding consent to any future subtenant. During the pendency of this suit, appellee began negotiations with the State of Florida to sublease the premises to the Department of Insurance for a period of two years. Under an agreement ultimately reached, the Department would pay $200,000 for improvements and a rent of $14.50 per square foot. Appellant again withheld consent on the ground that the State was not in the business of retail sales and would thus not trigger the percentage rent clause. Appellee responded with a motion for emergency temporary relief.

The trial court entered a temporary injunction enjoining appellant from withholding its consent to the State of Florida subleasing the property, finding that unless injunctive relief was allowed, appellee would lose the value of the leasehold improvements, and would have to continue paying rent with little chance of renting the property to a tenant suitable to appellant. Appellant's refusal to consent to the proposed sublease was commercially unreasonable under the circumstances of the case. In granting the temporary injunction, however, the court held that damages are an appropriate remedy to compensate a landlord for breach of a percentage rent clause in a lease. The court reserved jurisdiction to assess the amount of any damages which may have been sustained by appellant. The court subsequently modified its order, requiring appellant to sign any applications for variance or rezoning which may be required for the proposed sublease. This order was affirmed by this court without opinion.

Appellant subsequently filed a motion to modify the temporary injunction, alleging that state office employees, who were then occupying the premises, were parking in all available parking spaces, creating parking problems for other tenants of the shopping plaza. Appellant further contended in the motion that it had attempted to negotiate reasonable parking arrangements with appellee, to no avail. Appellant requested that the temporary injunction be modified to require appellee and its sublessee the Department of Insurance to comply with certain parking restrictions. Appellee responded with a motion for attorney fees and costs under section 57.105, Florida Statutes.

The trial court, in a pretrial order, determined that the issues remaining for trial were (1) whether appellant was entitled to damages because appellee subleased the premises to a nonretail tenant; (2) whether appellee was entitled to a permanent injunction prohibiting appellant from continuing to engage in a pattern of unreasonable conduct and, if so, the scope of the injunction; (3) whether appellant was entitled to modification of the temporary injunction such that reasonable parking restrictions would be imposed *740 upon appellee and its subtenant; and (4) whether appellee was entitled to attorney fees and costs. During the two-day bench trial which followed, nine witnesses testified, and the testimony focused upon three broad areas, whether the shopping center could attract tenants that could trigger the percentage rent clause, whether appellant had sustained damages, and the effect of the state office employees' parking habits on the shopping plaza.

Appellant presented testimony that, after the State Department of Insurance moved into the shopping plaza, another tenant, a retail office supply business, experienced a drop in sales, because the office employees took all of the available spaces in front of the office supply store. This tenant ultimately moved out. Appellant also presented the testimony of a person who had in the past expressed interest in subleasing the shopping center space from appellee for the purpose of operating a gourmet grocery store. This person anticipated that his sales would trigger the percentage rent clause and attempted to negotiate with appellee for an increase in the percentage rent threshold. Appellee's refusal to negotiate as to this point "killed" this prospective subtenant's interest in subleasing the space.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

James and Melanie Nipper v. Walton County, Florida, a political etc.
208 So. 3d 331 (District Court of Appeal of Florida, 2017)
Bull Motors, LLC v. Brown
152 So. 3d 32 (District Court of Appeal of Florida, 2014)
Grant v. GHG014, LLC
65 So. 3d 1066 (District Court of Appeal of Florida, 2010)
Bradsheer v. Florida Department of Highway Safety & Motor Vehicles
20 So. 3d 915 (District Court of Appeal of Florida, 2009)
Sensormatic Electronics Corp. v. TAG CO. US, LLC
632 F. Supp. 2d 1147 (S.D. Florida, 2008)
Ryan v. Lobo de Gonzalez
921 So. 2d 572 (Supreme Court of Florida, 2005)
United Automobile Insurance v. Sanar Clinical Rehab Center, Inc.
766 So. 2d 356 (District Court of Appeal of Florida, 2000)
Simonik v. Patterson
752 So. 2d 692 (District Court of Appeal of Florida, 2000)
Lee County v. Fort Myers Airways, Inc.
688 So. 2d 389 (District Court of Appeal of Florida, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
646 So. 2d 737, 1994 Fla. App. LEXIS 5715, 1994 WL 256961, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastern-federal-v-state-office-supply-fladistctapp-1994.