Hawk's Cay Investors, Ltd. v. Brandy Marine of The Keys, Inc.

524 So. 2d 681, 13 Fla. L. Weekly 729, 1988 Fla. App. LEXIS 1038, 1988 WL 21009
CourtDistrict Court of Appeal of Florida
DecidedMarch 16, 1988
DocketNo. 87-0703
StatusPublished
Cited by3 cases

This text of 524 So. 2d 681 (Hawk's Cay Investors, Ltd. v. Brandy Marine of The Keys, Inc.) 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
Hawk's Cay Investors, Ltd. v. Brandy Marine of The Keys, Inc., 524 So. 2d 681, 13 Fla. L. Weekly 729, 1988 Fla. App. LEXIS 1038, 1988 WL 21009 (Fla. Ct. App. 1988).

Opinion

HERSEY, Chief Judge.

In an order which is labelled “Partial Final Judgment,” Brandy Marine Of The Keys, Inc. (Brandy) was awarded $80,000 as an entitlement for termination of services under a contract. Because the count of the amended complaint on which this adjudication was based and several counts which remain pending in the lower court involve the same transaction, this appeal cannot appropriately be treated as one from a final order. See Stein v. Hospital Corp. of America, 481 So.2d 1264 (Fla. 4th DCA 1986). Review of the “Partial Final Judgment” is available, however, pursuant to rule 9.130(a)(3)(C)(iv), Florida Rules of Appellate Procedure.

The issues are whether the termination fee is payable where good cause for termination is shown and whether the fee is actually a penalty.

Brandy and Hawk’s Cay Investors, Ltd. (Hawk’s Cay), entered into a “Marina [682]*682Management Agreement” dated June 25, 1983, under which Brandy agreed to manage the marina, pool, and other water activities and facilities at appellants’ resort. Hawk’s Cay agreed to pay Brandy a monthly fee for its management services, which fees would increase each year. Hawk’s Cay also agreed to pay Brandy a percentage of the marina’s net profits, also subject to increment each year to a maximum of 40%.

Paragraph two of the agreement provided that the initial term of employment would be from August 1, 1983, to December 31,1988, and that after the initial term, either party could cancel the agreement by giving ninety days prior written notice of cancellation. Paragraph 3(E) of the agreement provided that if Hawk’s Cay exercised its right of cancellation, it would be obligated to pay Brandy “a sum equal to twelve (12) times the monthly fee, paid to BRANDY during the twelve (12) months immediately preceding BRANDY’S receipt of the cancellation notice.... ” Paragraph four of the agreement stated that if either party should be in default in the performance of its obligations, the non-defaulting party would give written notice of such default and, after allowing ten days or a reasonable time for the defaulting party to cure, the non-defaulting party could, inter alia, terminate the agreement.

On August 20,1984, an Addendum to the Marina Management Agreement was executed in which paragraph two of the agreement was amended by adding the following: “This Agreement may be terminated by Resort [Hawk’s Cay] at any time during the initial term by Resort giving Brandy Thirty (30) Days written notice of termination. In the event Resort terminates this Agreement during the initial term, Resort agrees to pay Brandy a termination fee of $80,000.” (Emphasis added.)

On September 11, 1984, Hawk’s Cay sent Brandy a letter terminating Brandy’s management services effective immediately, and stating that the agreements between them were unconscionable, defective and illusory, and that therefore it was Hawk’s Cay’s position that “no valid agreement exists....”

Brandy thereafter brought suit, alleging in count I of the amended complaint that Hawk’s Cay had failed to give it 30 days notice of termination and had failed to pay it $80,000 pursuant to the addendum agreement. Hawk’s Cay filed an answer, affirmative defenses and counterclaim, alleging that Brandy had failed to perform its services as promised, and that the written agreements between the parties were unconscionable and fraudulently induced.

Brandy moved for a separate, nonjury trial on count I of its amended complaint, and the court granted the motion. The parties entered into a pretrial stipulation, agreeing that the nonjury trial would be “for the purpose of determining the meaning, interpretation and applicability of the Addendum Agreement, in order to potentially resolve the issue raised in Count I of plaintiff’s Amended Complaint.” The parties also agreed that “issues relating to performance and all other issues not resolved in this phase of the trial will be reserved for the jury phase of this trial, if necessary. Specifically, whether there were grounds to terminate ^plaintiff for cause shall not be tried in this part of the trial.” (Emphasis added.)

The nonjury trial was held on December 2,1986, after which the trial court rendered the order in favor of Brandy for $80,000 plus interest.

Appellants filed a motion for clarification, asking the court to state whether it had adjudicated the issue of Hawk’s Cay’s ability to terminate Brandy for cause without paying the termination fee, and what effect the court’s ruling had on the remaining counts of the complaint and on appellants’ defenses and counterclaims. The court thereafter rendered an order stating that it had determined only that “the termination fee must be paid regardless of the purported reason for termination.”

The addendum clause states that Hawk’s Cay can terminate the contract during the initial term by giving thirty days notice, and if it does so, it must pay Brandy $80,000. Under this clause, there[683]*683fore, Hawk’s Cay could terminate the contract for any reason or for no reason, but was obligated to pay the $80,000 fee, regardless of the reason or lack of reason for termination. There is nothing in the language of the addendum to support appellants’ argument that the fee need not be paid if termination was “for cause.” We therefore conclude that the trial court correctly (although perhaps prematurely, as we will discuss subsequently) determined this issue.

Appellants next contend that the addendum clause providing for the $80,000 termination fee should be regarded as a liquidated damages provision, and that such provision should be held invalid as constituting an unlawful penalty. A liquidated damages provision is proper only when the damages at the time of contracting are by their nature uncertain, and when the damages to be paid are not excessive or unreasonable. Secrist v. National Service Industries, Inc., 395 So.2d 1280 (Fla. 2d DCA 1981).

Appellees counter this argument by contending that the addendum clause providing for the termination fee should be regarded as valid consideration for Hawk’s Cay’s right to terminate the contract during the first term rather than as a liquidated damages provision, and relies on Bayshore Royal Company v. Doran Jason Company of Tampa, Inc., 480 So.2d 651 (Fla. 2d DCA 1985). In Bayskore, the plaintiff sued the defendant for approximately $44,000 in real estate brokerage commissions. The defendant did not dispute that the obligation for the commissions arose, but asserted that it was released from the obligation by a subsequent contract. That contract provided that the defendant would be released from liability for the commissions if the plaintiff went into default under a loan agreement of plaintiff with a third party, which was partially guaranteed by the defendant. It was undisputed that the plaintiff defaulted on the loan.

The second district found that the contractual provision under which the plaintiff conditionally promised to release the defendant from liability for the commissions did not constitute a liquidated damages clause which could be found to be an unlawful penalty, but constituted consideration provided by the plaintiff for the defendant’s reciprocal promise to the plaintiff to guarantee the loan agreement.

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Bluebook (online)
524 So. 2d 681, 13 Fla. L. Weekly 729, 1988 Fla. App. LEXIS 1038, 1988 WL 21009, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hawks-cay-investors-ltd-v-brandy-marine-of-the-keys-inc-fladistctapp-1988.