Fernandez v. Vazquez

397 So. 2d 1171, 21 A.L.R. 4th 181
CourtDistrict Court of Appeal of Florida
DecidedApril 28, 1981
Docket80-1451
StatusPublished
Cited by72 cases

This text of 397 So. 2d 1171 (Fernandez v. Vazquez) 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
Fernandez v. Vazquez, 397 So. 2d 1171, 21 A.L.R. 4th 181 (Fla. Ct. App. 1981).

Opinion

397 So.2d 1171 (1981)

Jose A. FERNANDEZ and Hialeah Bakery, Inc., Appellants,
v.
Oscar VAZQUEZ and Filiberto Portales D/B/a Job Development, Appellees.

No. 80-1451.

District Court of Appeal of Florida, Third District.

April 28, 1981.

Arango & Galarraga and Jorge Sanchez-Galarraga, Coral Gables, for appellants.

Taylor, Brion, Buker & Greene and Arnaldo Velez and Maria C. Arriola Velez, Miami, for appellees.

Before HENDRY, SCHWARTZ and FERGUSON, JJ.

FERGUSON, Judge.

Lessees, Jose Fernandez and Hialeah Bakery, Inc., appeal from an order of summary judgment dismissing their counterclaim against lessors, Oscar Vazquez and Filiberto Portales, doing business as Job Development. The issue on appeal is whether a lessor may arbitrarily refuse consent to an assignment of a lease which provides that the lessee shall not assign or sublease the premises without written consent of the lessor. We have been unable to find any case in Florida where this issue has been squarely presented to the court. The very able trial judge granted the summary judgment based on what the state of the law was assumed to be.[1]

*1172 On March 1, 1976, Fernandez and Hialeah Bakery entered into a five-year business lease with Leonard and Shirley Groh, then the owners of the property. Paragraph one of the lease provides that the lessee shall not assign the lease, nor sublet the premises without the written consent of the lessor.

On July 27, 1978, Vazquez and Portales purchased the property from the Grohs and became the new lessors. On July 17, 1978, lessees Fernandez and Hialeah Bakery entered into a written contract to sell the bakery shop to Rubin Gonzalez, a defendant below. Lessors refused to consent to this assignment. Subsequently, on August 21, 1978, Vazquez and Portales offered to approve Gonzalez under a new lease if he would pay an additional rent of $250 a month. Since Gonzalez was not interested in acquiring the business under the increased rent and since Vazquez and Portales would not otherwise consent to the assignment, the purchase and sale contract between Gonzalez and lessees was rescinded. Hialeah Bakery remained in possession of the premises.

On August 30, 1978, Vazquez and Portales filed suit against Fernandez and Hialeah Bakery seeking to cancel the lease for untimely payment of the August 1978 rent installment and to evict Fernandez, Hialeah Bakery, and Gonzalez from the premises. Fernandez and Hialeah Bakery counterclaimed alleging lessors breached the lease agreement by refusing to consent to the assignment. Vazquez and Portales filed a motion for summary judgment as to the counterclaim, which was granted by the trial judge.

The law generally favors free alienation of property and under common law a tenant has the right to assign his leasehold interest without the consent of the lessor. See Frissell v. Nichols, 94 Fla. 403, 114 So. 431 (1927); 3A R. Thompson, Real Property, § 1200 (J. Grimes, 1981). In order to protect the landlord from this common law right of assignment, many leases expressly provide that the property cannot be assigned without the written consent of the landlord. A decreasing majority of jurisdictions hold that when such written consent is required, a landlord may arbitrarily and capriciously refuse to approve a subtenant or assignee.[2]See B & R Oil Co., Inc. v. Ray's Mobile Homes, Inc., 422 A.2d 1267 (Vt. 1980); Carleno v. Vollmert Tire Co., 36 Colo. App. 446, 540 P.2d 1149 (1975); Segre v. Ring, 103 N.H. 278, 170 A.2d 265 (1961); Grumen v. Investor's Diversified Services, 247 Minn. 502, 78 N.W.2d 377 (1956).[3] See *1173 also 49 Am.Jur.2d, Landlord and Tenant, § 423; 51C C.J.S., Landlord and Tenant § 36(1); Annot. 31 A.L.R.2d 821 (1953).

The arbitrary and capricious rule is undergoing continued erosion. An increasing number of jurisdictions hold that when a lease requires written consent prior to assignment or subleasing, but does not contain any language limiting the withholding of that consent, such consent may not be arbitrarily or unreasonably refused. Homa-Goff Interiors, Inc. v. Cowden, 350 So.2d 1035 (Ala. 1977); Arrington v. Walter E. Heller International Corp., 30 Ill. App.3d 631, 333 N.E.2d 50 (1975); Shaker Building Co. v. Federal Lime and Stone Co., 28 Ohio Misc. 246, 277 N.E.2d 584 (1971). See Sommer v. Kridel, 74 N.J. 446, 378 A.2d 767 (N.J. 1977) (residential lease requiring written consent of landlord), holding that a landlord has the duty to mitigate damages. At least three states, Alaska,[4] Delaware,[5] and New York,[6] have prohibited a landlord from arbitrarily refusing consent in cases involving residential leases. See also Restatement (Second) Property, Landlord and Tenant, § 15.12 (1977); Weissenberger, "The Landlord's Duty to Mitigate Damages on the Tenant's Abandonment: A Survey of Old Law and New Trends," 53 Temp.L.Q. 1 (1980).

Underlying the cases abolishing the arbitrary and capricious rule is the now well-accepted concept that a lease is a contract[7] and, as such, should be governed by *1174 the general contract principles of good faith and commercial reasonableness. One established contract principle is that a party's good faith cooperation is an implied condition precedent to performance of a contract. Where that cooperation is unreasonably withheld, the recalcitrant party is estopped from availing herself of her own wrongdoing. Dade County v. O.K. Auto Parts of Miami, Inc., 360 So.2d 441 (Fla.3d DCA 1978), cert. denied, 379 So.2d 207 (Fla., 1979). See also Zim v. Western Publishing Co., 573 F.2d 1318, 1324 (5th Cir.1978); Knowles v. Henderson, 156 Fla. 31, 22 So.2d 384 (1945); Hart v. Pierce, 98 Fla. 1087, 125 So. 243 (1929); Paul v. Hurley, 315 So.2d 536 (Fla. 4th DCA 1975); Casale v. Carrigan and Boland, Inc., 288 So.2d 299 (Fla. 4th DCA 1974); 3 A. Corbin, Contracts, §§ 767, 768 (1960); 5 Williston Contracts, §§ 676, 677 (3d ed. Jaeger 1972).

Where a lessee is entitled to sublet under common law, but has agreed to limit that right by first acquiring the consent of the landlord, we believe the lessee has a right to expect that consent will not be unreasonably withheld. We cite with approval the rationale of the courts in Homa-Goff, supra 350 So.2d at 1038 and Arrington, supra 30 Ill. App.3d 631, 333 N.E.2d at 58:

Where the lease merely contains a provision — without more — granting a person, normally a landlord, the power to withhold consent, regardless of whether explicitly qualified to reasonable exercises of the power ... the courts have held the person's refusal to consent to a person acceptable by reasonable commercial standards to be an unreasonable exercise and thus violative of the lease.

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Bluebook (online)
397 So. 2d 1171, 21 A.L.R. 4th 181, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fernandez-v-vazquez-fladistctapp-1981.