2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 8-31-2005 

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Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

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. F ir s t Natl B ank P

A" (2005). 2005 D e cisio n s . P ape r 634. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2005/634Hon. J ohn P. Fullam, Senior Judg e, United States District Court for the Easter

n District * of Pennsylvania, sitting by designation. NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N os . 04- 2874 and 04- 3086 S E NS OR M AT I C E L E CT RO NI CS CO RP OR AT I ON, v. F I RS T NAT I ONAL BA NK P E NNS YL VANI A; W IN N E R & B A G N A R A , IN C .; J A M E S E . W IN N E R , J R .,

Sens or m at i c El ectr oni cs C orpor at i on, A ppel l anti n 04- 2874

W in n e r & B a g n a ra , In c . & J a m e s E . W in n e r, J r., A ppel l ant s i n 04- 3086

O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e W e ste rn D istric t o f P e n n sy lv a n ia ( D . C . N o. 99- cv- 00756) D i s t r i ctJ udge: H onor abl e A r t hurJ . Schw ab

A r gued J ul y11, 2005 B efor e: SL O V I T E R and M cK E E , C i r cui tJ udges , and FU L L A M , D i s t r i ctJ udge * ( Fi l ed: A ugus t31, 2005)2

Pet erB us cemi , E s q. M or gan, L ew i s & B ocki us 1 1 1 1 P e n n s y l v a n i a A v e n u e , N . W. W as hi ngt on, D C 20004 Ke l l M . Da ms g a a r d , E s q . ( AR GUE D) M or gan, L ew i s & B ocki us 1701 M arketSt r eet Phi l adel phi a, PA 19103 A l fr ed J . L echne rJ r . , E s q. M or gan, L ew i s & B ocki us 502 C arnegi e C ent er Pr i ncet on, N J 08540 C ouns el f orAppel l ant

/ C r os s -Appel l ee Se ns or m at i c El ectr oni cs C or por at i on StuartC . G aul J r . , E s q. J o s e p h A. Ka t a r i n c i c , E s q . ( AR GUE D) D avi d G . R i es , E s q. T horp, R eed & A r m s t r ong 310 G r antSt r eet O ne O xfor d C entr e, 14 Fl oor th Pi t t s bur gh, PA 15219 C ouns el f orAppel l ees/

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i nn er, Jr. S c o t tD. Ce s s a r , E s q . ( AR GUE D) E c k e rt, S e a m a n s, C h e rin & M e llo tt 600 G r antSt r eet 44 Fl oor th Pi t t s bur gh, PA 15219 C o u n se l fo r Ap

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OP I NI ON3

FU L L A M , Seni orD i s t r i ctJ udge. Sens or m at i c appe al s fr om t he or der s of the U ni t ed St at es D i s t r i ctC our tforthe W es t ern D i s t r i ctof Penns y l vani a, gr ant i ng s um m aryj udgm enti n favorof Fi r s tN at i onal B ank ( “Fi r s tN at i onal ”) , J ames E. W i nner( “W i nner ”) and W i nner& B agnar a ( “W & B ”) on Sens or m at i c’ s cl ai m s fors peci fi c per form ance , decl ar at oryr el i ef a nd damages . T he D i s tr i ctC our thad di ver s i t yj ur i s di ct i on under28 U . S. C . § 1332; thi s cour thas j ur i s di ct i on p u r s u a n tt o 2 8 U. S . C. § 1 2 9 1 . F o rt h e r e a s o n s e x p l a i n e d b e l o w, we a f f i r m. I. In re v iew in g a g ra n t o f

su m m a ryju d g m e n t, w e m u st v iew “ th e u n d e rly in g f a c ts and al l r eas onabl e i nfer ence s t her efr om i n t he l i ghtm os tfavor abl e t o t he part yoppos i ng th e m o tio n .” P e n n s y lv a n ia C o a l A s s ’n v . B a b b itt, 6 3 F .3 d 2 3 1 , 2 3 6 (3 d C ir . 1 9 9 5 ). I n J une, 1967, W i nner , t hr ough hi s w hol l y - ow ned corpor at i on W & B , w as gr ant ed ri g h ts t o o p era te th e P en n sy lvan ia fran ch ise o f S en so rm ati c. N o t l o n g there af ter, Sens or m at i c conc l uded thatt he fr anchi s e s y s t em w as notan ef fec t i ve means thr ough w hi ch t o s el l i t s pr oduct, and bega n a r epur chas e orl eas e- back pr ogr am. T he s t ructur e of th e su b se q u e n t ag re e m e n t re a c h e d b e tw e e n W & B a n d S e n so rm a tic is a t th e c e n ter o f th is l i t i gat i on. U ndert he t erm s of the Fr anchi s e Leas e A gr eement( “FL A ”) , W i nnergr ant ed Sens or m at i c a 20 y earl eas e begi nni ng on D ece m ber1, 1978 and endi ng D ece m ber1, 1998. T he FL A gave Sens or m at i c the r i ghtt o t erm i nat e the FL A on el even oc cas i ons d u r i n g th e t e r m, a n d a l s o g a v e S e n s o r ma t i c th e r i g h tt o r e p u r c h a s e a tth e e n d o f th e t e r m,4

i n excha nge fora l um p s um paym ent . A pp. at715- 717. T he t ot al val ue of the dea l for W in n e r w a s in e x c e s s o f $ 6 ,5 0 0 ,0 0 0 . T h e o p tio n to re p u rc h a se th e f ra n c h ise a t th e e n d o f

th e lea se ter m is s e t f

o rth in S ect i on 7 o f t he F L A , as fol l ow s: W & B h e re b yg ra n ts to [ S e n so rm a tic] th e o p tio n to p u rc h a se . . .all rig h t, t itl e and i nt er es tof W & B undert he Fr anchi s e A gr eement , fora pur chas e pr i ce o f $ 1 , 0 0 0 , 0 0 0 . S u ch o p ti o n sh all b e e x erc isab le on lyat th e e n d o f th e term of thi s A gr eementand maybe exe r ci s ed by[Sens or m at i c] gi vi ng W & B not le s s th a n n in e ty (9 0 ) d a y s w ri tte n n o tic e p ri o r t o th e e n d o f th e te rm h e re o f. .

. . T he cl os i ng of the pur chas e upon exe r ci s e of s uch opt i on s hal l t ake pl ace at th e o ff ices o f [ S en so rm ati c] w ith in n inety(90 ) da y s o f th e e n d o f th e term of thi s A gr eementata t i m e s peci fi ed by[Sens or m at i c] on atl eas tt en ( 10) day s not i ce t o W & B . A tt he cl os i ng, [Sens or m at i c] w i l l del i vera ce r t i fi ed o r b a n k c a sh ier ’s c h e c k f o r th e p u rc h a se p ric e , an d W & B a n d W in n e r sh a ll del i vert o [Sens or m at i c] . . . a r el eas e s ubs t ant i al l yi n t he form annexe d h e re to a s E x h ib it B . . . .
A p p . a t 7 1 6 . A tt he s ame t i m e the FL A w as s i gned, the part i es al s o ent er ed i nt o t he R es t at ed Fr anchi s e A gr eement( “R FA ”) t o govern t he s cope of the Fr anchi s e. A pp. at843. T he R FA des cr i bed the r i ght s of the part i es w i t h r egar d t o as s i gnm entand out l i ned theArticle 6 of the RFA provides that the F ranc hisee c annot assign the Agreement without 1 prior approval and right of first ref usal of Sensormatic. H owever, that provision in no way aff ects the right of

the Franchise e to assign pay ments under the A greement. 5 uni ver s e of pr oduct s cover ed byt he fr anchi s e. A ft erexec ut i on of the FL A and R FA , Sens or m at i c r emoved t he W i nnername fr om a ll b u sin e ss o p e ra tio n s a n d in se rte d its o w n se rv ice a n d su p p o rt p e rso n n e l. D u rin g th is tim e p e rio d W & B e x e c u ted a n a g re e m e n t th a t p u rp o rte d to a ss ig n th e f ra n c h ise to W i nner , butdi d notobt ai n appr oval fr om Sens or m at i c; W & B then exe cut ed an outof e x iste n c e lette r. O n S e p tem b e r 2 1 , 1 9 7 9 , the p a ym e n ts u n d e r th e F L A w e re a ss ig n e d to F irst N a tio n a l as c o llate ra l f o r W in n e r’s lin e o f

c re d it. F ro m th a t p o in t o n , S e n so rm a tic

1 c o n d u c te d a ll b u s in e s s re la te d to th e f ra n c h is e th ro u g h F ir s t N a tio n a l. Sens or m at i c ful l yper form ed underthe FL A forthe ent i r e t erm . O n O ct ober13, 1 9 9 8 , 4 7 d a y s b e f

o re th e e n d o f

th e lea se ter m , S e n so rm a tic s e n t w ritten n o tice o f its i nt entt o exer ci s e the r epur chas e opt i on; ther eaf t er , Sens or m at i c not i fi ed Fi r s tN at i onal that i ti ntended t o co m plet e fi nal paym ent and i nit i at e t he p urchase. A tthat t i m e, F i rs t N at i onal i nform ed Sens or m at i c that“eve r yt hi ng l ooked fi ne” a nd thatthe tr ans act i on w as r eadyt o pr ocee d. W i nnerhad no r ol e i n t hi s pr oces s , though he di d r eques tthatthe fi nal pay m ent be m ade in 19 99 for t ax p urposes. In N o v e m b e r, 1 9 9 8 F irst N a tio n a l in f o rm e d S e n so rm a tic th a t itf e lt u n c o m f

o rta b le m ovi ng forw ar d w i t houtW i nner . I n J anuary , the fi nal r el eas es w er e s entt o W i nnerand Fi r s tN at i onal butnei t herpart yr es ponded. T he nextcomm uni cat i on w as a l et t ers entby W i nnert o Sens or m at i c s t at i ng t hatSens or m at i c w as i n defa ul tunderthe FL A forfai l i ngThe pa rties choseFlorida

law in the Agreement, and there does not a ppear to be any 2 relevant conf

lict between Pennsylvania and F lorida law. 6 to ten d er p ay m en t byF eb rua ry2 8 , 1 9 9 9 . S en so rm ati c the n fil ed su itin the D istri ct C o u rt t o compel W i nnerand Fi r s tN at i onal t o per form underthe FL A and s el l back the f ra n c h is e . I n tw o s epar at e opi ni ons , t he D i s t r i ctC our tent er ed s um m aryj udgm enti n favorof Fi r s tN at i onal , W i nnerand W & B , rul i ng thatSens or m at i c had f ai l ed t o exer ci s e i t s opt i on i n a t i m el ym anner , hence t he opt i on had expi r ed. T he D i s t r i ctC our tal s o hel d t hat W i nnerw as t he ow nerof a f r anchi s e thatnow i ncl udes the expa nded pr oductl i ne of Sens or m at i c. I I . W e r evi ew a gr antof s um m aryj udgm entde novo, appl y i ng the s ame st andar d as the D i s tr i ctC our t . U ni on Paci fi c R . R . C o. v. G r eentr ee Tr ans p. T rucki ng C o. , 293 F. 3d 120, 125 ( 3d C i r . 2002) . Sum m aryj udgm enti s appr opr i at e w her e ther e ar e no genui ne is s u e s o f m a te ri a l f

a c t a n d th e m o v in g p a rt yis e n title d to ju d g m e n t a s a m a tte r o f la w . F e d . R . C iv . P . 5 6 (c ). A n iss u e is g e n u in e o n lyw h e re th e e v id e n c e is s u c h th a t a re a s o n a b le ju ry c o u ld f

in d f o r t h e n o n m o v in g p a rt y . A n d e rs o n v . L ib e rt yL o b b y , In c ., 477 U . S. 242 ( 1986) . I f the court , aft err evi ew i ng the evi dence i n t hi s l i ght , concl udes that “the ev iden ce is m ere lyco lorab le . . . o r i s n o t si g n ifi ca n tl yp rob ati v e” then su m m ary ju d g m e n t m a yb e g ra n te d . Id . a t 2 4 9 -5 0 . III . U nd er Fl ori da co ntr actl aw , the C ou rtm ustdeterm i ne the i ntentof the part i es. 27

M ay fl ow erC orp. v. D avi s , 655 So. 2d 1134 ( Fl a. D i s t . C t . A pp. 1994) . W her e ther e i s no ambi gui ty , t he ac tual l anguage of the contr acti s the bes tevi dence of i nt ent . U ni t ed St at es v . S o u th A tla n tic P ro d u c tio n C re d it A s s n ., 6 0 6 S o . 2 d 6 9 1 , 6 9 5 (F la . D is t. C t. A p p . 1 9 9 2 ). A contr acti s ambi guous onl yi f i ti s “s us cept i bl e t o t w o di ffe r enti nt erpr et at i ons , eac h one of w hi ch i s r eas onabl yi nferr ed fr om the t erm s of the contr act . . . ” M i l l erv. K as e, 789 So. 2d 1095, 1097 ( Fl a. D i s t . C t . A pp. 2001) . O nl yi f an a m bi gui t yexi s t s m aythe C our tt hen c o n s id e r p a ro l e v id e n c e o f in te n t. T he F L A i s unam biguou s w i t h regard t o the t i m e requi rem ents of the repurchase opt i on. T he FL A s t at es t hatt he “opt i on sh a llb e e x e rc is a b le o n ly at th e e n d o f th e te rm . .

. ” and thatt he opt i on “ m ay be exe r ci s ed by[Sens or m at i c] gi vi ng W & B notl es s than n in e ty(9 0 ) d a y s w ritten n o tice . . .” S e n so rm a tic a rg u e s th a t u se o f th e ter m “ m a y ” is ambi guous and i ndi cat es t hatt he w r i t t en not i ce pr ovi s i on i s opt i onal , es peci al l ys i nce the te rm “ s h a ll” w a s u s e d in th e p re c e d in g c la u s e . W er e Sens or m at i c’ s pos i t i on acc ept ed, the r equi r ementof w r i t t en not i ce w oul d be a nu l l i ty . T his cl earl yw as not the int ent of the p art i es, as expressed i n the con t ractas a w hol e. A s t he D i s t r i ctC our tcorr ect l yhel d, “[i ] ti s notr eas onabl e t o r ead the not i ce pr ovi s i on ent i r el youtof the agr eement , ort o r ead i tas m eani ng thatany‘ r eas onabl e’ not i ce i s s uffi ci ent . I f the part i es i nt ended a nytype of not i ce t o s uffi ce, ther e w oul d have b e e n n o n e e d to in c lu d e th e 9 0 -d a yp ro v is io n , o r t h e ‘i n w ri tin g ’ p ro v is io n .” A p p . a t 1 8 . A s a m a tter o f

law , S e n so rm a tic f

a iled to e x e rc ise its o p tio n to p u rc h a se in a tim e ly m an n er.8

Sens or m at i c al s o ar gues t hatfor fei tur e of a n opt i on bas ed on a 47 da ydel ayi s not a j us tr es ul tunderFl or i da equi t yl aw . I tcont ends that , des pi t e the l at e not i ce, i tw as r eady , w i l l i ng and abl e t o per form t he s al e byFebruary28, 1999, and the doctr i ne of s u b s ta n tia l p e rf

o rm a n c e s h o u ld b e in v o k e d to f o rc e A p p e lle e s to c o m p le te th e tr a n s a c tio n . S e e B u rg e r K in g v . M a so n , 7 1 0 F .2 d 1 4 8 0 , 1 4 9 0 (1 1 C ir. 1 9 8 3 ) (h o ld in g th a t “a p a rty th w ho t ender s l at e mayenfor ce the contr actw i t h due al l ow ance foranydamages caus ed by t ar di nes s ”) ; D ugan v. H ai ge, 54 So. 2d 201 ( Fl a. 1951) ( fi ndi ng thatw her e the part i es ent er ed i nt o a 10 y earl eas e w i t h an opt i on t o r enew on 30 day s not i ce, and w her e t enant gave 12 da y s not i ce, t he ow nercoul d notr efus e t o r enew w her e he ha d notbeen ha r m ed b yth e d e la ya n d f

a ir n e s s c o m p e lle d re n e w a l) . T he funda m ent al fl aw i n A ppel l ant ’ s pos i t i on i s thatatthe t i m e i tt ender ed per form ance t her e w as no contr actt o enfor ce: the opt i on had expi r ed on D ece m ber31, 1998, and no pur chas e contr actcoul d have be en form ed ther eaf t erw i t houtbi l at er al agr eement . T he t i m e per i od foracc ept ance of the opt i on w as expr es s l yl i m i t ed bythe t erm s of the FL A , Sens or m at i c di d notactw i t hi n t hi s t i m e, and as a r es ul tthe opt i on w as f o rf e ited . S in c e th e p u rc h a se o p tio n is th e o n lyp ro v isio n u n d e r w h ich S e n so rm a tic c o u ld cl ai m a r i ghtt o buyt he fr anchi s e, fai l ur e t o pr oper l yi nvoke thatopt i on r es ul t ed i n t he l os s of the pur chas e r i ght . Sens or m at i c i s a s ophi s t i cat ed ent i t ythatw as ful l yaw ar e of th e ter m s o f

th e F L A w h e n th a t ag re e m e n t w a s s ig n e d a n d c a n n o t n o w b e h e a rd to c o m p lain th a t th e re su lt i s u n f a ir, es p e c iallysin c e th e tim in g o f th e n o tice w a s c o m p lete ly u n d e ri t s c o n t r o l . T h i s r e s u l ti s i n a c c o r d w i t h F l o r i d a l a w . S e e M a t t h e w s v . K i n g s l e y,9

100 So. 2d 445 ( Fl a. D i s t . C t . A pp. 1958) ( w hen an opt i on contr acts peci fi es the t i m e for not i ce, i ti s hel d i n l aw and equi t yt hatthe s t at ed t i m e i s t o be r egar ded as of the es s ence , w h e th e r e x p re s s ly sta te d s o o r n o t) ; S o u th In v e s tm e n t C o rp . v . N o rt o n , 5 7 S o . 2 d 1 , 2 ( Fl a. 1952) ( hol di ng t hatan opt i on contr acti s nota contr actof s al e, i ti s a uni l at er al co n tr ac t pro v iding the o p ti o n h o lder w ith the righ t t o p u rch ase ). Sens or m at i c’ s w ai verar gum ental s o l acks m er i t . Sens or m at i c al l eges thatthe a c tio n s o f

F irst N a tio n a l an d W in n e r h a d th e e f f e c t o f w a iv in g a n o b

jec tio n to th e late not i ce. Speci fi cal l y , Sens or m at i c poi nt s t o W i nner ’ s r eques tthatthe fi nal paym entbe m ade i n 1999 fort ax purpos es , and Fi r s tN at i onal ’ s s t at ementthat“eve r yt hi ng l ooked f in e ” a s in d ic a tiv e o f

th e p a rt ie s u n d e rs ta n d in g th a t n o tic e w a s n o t a n is s u e . H ow ever , as A ppel l ees not e, Fl or i da l aw on w ai verr equi r es s om e af fi r m at i ve act i on bythe part i es befor e the C our tw i l l r ecogni ze w ai verof a c ontr actpr ovi s i on. See Peni ns ul a Fed. Savi ngs & L oan v. D K H Pr op. , 616 So. 2d 1070 ( Fl a. D i s t . C t . A pp. 1993) ( hol di ng thatw her e pl ai nt i ff c l ai m ed i thad pr ovi ded or al not i ce of opt i on acc ept ance and d ef en d an t fail ed to o b

ject, w aive r co u ld b e c o n side red ); P an A m . E n g ’g C o . v . P o n ch o ’s C o n stru cti o n C o . , 3 8 7 S o . 2 d 1 0 5 2 , 1 0 5 3 (F la. D ist . C t. A p p . 1 9 8 0 ) (ho lding that w h ere s ub- contr act orper form ed pur s uantt o an or al change or der , the pos s i bi l i t yof fr aud al l ow ed the modi fi cat i on t o s t and) . I n t hi s cas e the r ecor d s how s thatno aff i r m at i ve act i on t o w ai ve the 90- daynot i ce pr ovi s i on w as t aken byanypart y , hence the no w ai ver argum ent fai l s. I V.10

W e al s o aff

i r m t he D i s t r i ctC our t ’ s or derdefi ni ng the s cope of the fr anchi s e and gr ant i ng W & B and W i nnerow ner s hi p r i ght s . Sens or m at i c fi r s tar gues thatthe D i s t r i ct C o u rterred in h o lding that itco u ld n o t t erm inate the fra n ch ise i n 2 0 0 4 b ase d o n W inn er’s as s i gnm enti n vi ol at i on of Sect i on 6 of the R FA . W e fi nd thatSens or m at i c’ s purpor t ed t erm i nat i on w as notval i d beca us e W & B ’ s bus i nes s oper at i ons and as s i gnm entdi d not b re a c h th e R F A . W & B i s a Penns y l vani a corpor at i on, and underPenns y l vani a l aw a corpor at i on m aydi s s ol ve onl ybycompl y i ng w i th 15 Pa. C . S. §§ 1972- 1977, s t eps w hi ch w er e not t aken here. M erel ysi gn i ng an o ut of exis t ence lett er di d n ot el i m i nate W & B as a corpor at e ent i t y , t hus al l ow i ng t he companyt o m ai nt ai n a bus i nes s i dent i t yas r equi r ed by th e R F A . M o re o v e r, if W in n e r’s a ttem p t to tra n sf e r th e f ra n c h ise f

ro m W & B ’s n a m e to hi s ow n s ucce eded, anys uch as s i gnm entw oul d have be en voi d underthe t erm s of the R F A , ra th e r t h a n a b a s is f o r t e rm in a tin g th e R F A .

V. T he fi nal i s s ue, r ai s ed bybot h W i nnerand Sens or m at i c, has t o do w i t h t he pr oper s cope of t he fr anchi s e now ow ned byW i nnerand W & B . W e w i l l aff i r m the s cope of

t he f ra n c h ise a s d e ter m in e d b yth e D istric t C o u rt. T he R FA cont ai ns a def i ni t i ons s ect i on thatl i s t s the pr oduct s cover ed bythe A gr eement . Subse ct i on 1( e) des cr i bes “A ut om at i c TheftD et ect i on U s es ” as us es “fort he p re v e n tio n a n d d e te c tio n o f s h o p lif tin g a n d o th e r t h e f

t a n d in c lu d e s , b u t is n o t lim ite d to ,” the contr ol and s ur vei l l ance of the i nvent ory , m achi nery , t ool s , and equi pm ents ol d or us ed byr et ai l er s , w hol es al er s , m anufa ctur er s and fr ei ghtt erm i nal s , and the pr ot ect i on of11

th e ite m s h e ld in lib ra ri e s , m u s e u m s , g a lle ri e s a n d g o v e rn m e n t in s titu tio n s . A p p . a t 6 8 7 . S e n s o r ma t i c a r g u e s t h a tt h e s c o p e o f th e f r a n c h i s e s h o u l d o n l yi n c l u d e th o s e i t e ms i n exi s t ence att he t i m e the R FA w as s i gned, beca us e of the phr as e “pr es ent l ybei ng m a rk e ted ” in th e d e f

in iti o n o f “ D e tec tio n D e v ice s.” A p p . at 6 8 6 . H o w e v e r, th is a rg u m e n t d o e s n o t m e s h w ith th e “ u s e ” b a s e d d e f in itio n o f th e p ro d u c ts c ite d a b o v e . T heftD et ect i on U s es ar e def i ned i n t he agr eementbas ed on thei rfunct i on, noton t he t echnol ogyus ed t o oper at e them, and the R FA expl i ci t l ys t at es the def i ni t i on i s not l i m i t ed t o t hos e enumer at ed us es . Forthatr eas on, i ti s cl earthatthe agr eement cont empl at es an expa ns i on of the us es of thos e pr oduct s as t echnol ogyevol ved overt he tw e n tyy e a r life o f

th e a g re e m e n t. W i nneral s o chal l enges t he D i s t r i ctC our t ’ s det erm i nat i on of the fr anchi s e s cope, argui ng t hat addi t i on al produ ct s, such as access con t rol dev i ces and bu rgl ar al arm s, al so f it th e d e f in iti o n o f T h e f t D e tec tio n U se s. A g a in , the lan g u a g e o f th e R F A u n d e rc u ts th is p o sit ion . S u b sec ti o n 1 (e)(i )-( iv) i n clud es n o m en ti o n o f a cc ess c o n tr o l dev ices o r alarm pr oduct s . W hi l e w e have gi ven thos e s ect i ons an expa ns i ve r eadi ng bas ed on the “us e” bas ed def

i ni t i on, t he conc ept s of ac ces s contr ol and i ntrus i on al ertdo notfal l w i t hi n the s c o p e o f c o n tr o l a n d s u rv e illa n c e . V I. F o r a ll th e a b o v e s ta te d re a s o n s , w e w ill a f f irm th e o rd e rs o f

th e D is tr ic t C o u rt .Se ns ormat i c El e c t r i c v. Fi r s tN a t i on a l Bank PA

N os . 04- 2874 and 04- 3086 SL O V I T E R , C i r cui tJ udge, di s s ent i ng I r es pect ful l ydi s s ent , pr i m ar i l ybeca us e I vi ew the r el evantdocumenti n l i ghtof the h i st oryof the rel at i on shi p b et w een the part i es. T he Sens or m at i c Sy s t em, devel oped bythe A ppel l ant , i s an aut om at i c theft d e tec tio n d e v ice in w id e u se th ro u g h o u t th e c o u n try . Ja m e s W in n e r, th ro u g h h is c o rp o ra tio n W & B , p u rc h a se d th e f ra n c h ise in 1 9 7 7 f

o r $ 6 6 ,0 0 0 , w h ich it l e a se d b a c k to S e n so rm a tic. U n d e r th e ter m s o f th e 1 9 7 8 F ra n c h ise L e a se A g re e m e n t, S e n so rm a tic agr eed t o payW i nneran i ni t i al s um of $250, 000, m onthl ypaym ent s for20 y ear s t ot al i ng $4, 766, 892. 00 and a f

i nal paym entof $1, 000, 000. Sens or m at i c ful l yper form ed. T he tw e n ty -y e a r te rm o n th e lea se w a s s e t to e x p ire o n D e c e m b e r 1 , 1 9 9 8 . A s th e m a jo rity o p in io n n o tes , the F ra n c h ise L e a se A g re e m e n t sta ted th a t if S e n so rm a tic c h o se to pur chas e the fr anchi s e att he end of t he l eas e, i tw as r equi r ed t o s end not i ce of i t s i nt ent 9 0 d a ys b e f

o r e t h e e x p i r a t i o n o f

t h e l e a s e . U n f

o r tu n a t e l y f

o ri t , i ts e n ti t s n o t i c e 4 7 d a ys b e f o re th e e n d o f

th e lea se ter m . T h e late n o tice d id n o t ca u se a n yp re ju d ice , an d th e re is no cl ai m t hat i tdid. N on et heles s, t he m aj ori t yho l ds S ensorm at i c’s op t i on t o repurchase expi r ed s ol el ybeca us e of the 47- dayl at e not i ce. In m yin terp re tatio n o f

th e d o c u m e n ts, I v iew th e F ra n c h ise L e a se A g re e m e n t, irre sp e c tiv e o f

its tit le, to b e a c o n tra c t w ith a n o p tio n to p u rc h a se . U n d e r F lo rid a law , if the Fr anchi s e Leas e A gr eementw as a s al es contr actforthe r epur chas e of the fr anchi s e, then Sens or m at i c w oul d have the def ens es of s ubs t ant i al per form ance and non- m at er i al13

br eac h. See Pul l am v. H er cul es , I nc. , 711 So. 2d 72 ( Fl a. D i s t . C t . A pp. 1998) ( di s cus s i ng the def ens e of s ubs t ant i al per form ance ) , A t l ant a J etv. L i ber t yA i r cr aftSer vs . , L L C , 866 So. 2d 148 ( Fl a. D i s t . C t . A pp. 2004) ( di s cus s i ng non- m at er i al br eac h) . T her e i s no poi nt t o a l engthydi s cus s i on i n t hi s r egar d. T he maj or i t yvi ew s the tr ans act i on di ffe r ent l yt han I d o , an d a c c o rd in g lyI d iss e n t.