Court Opinion

ID: 4677127
Source: CourtListenerOpinion
Date Created: 2021-04-14 15:03:41.305579+00
Date Added: 2024-06-11T08:03:36.573775
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

                         LENMAR REALTY, LLC,
                              Appellant,

                                      v.

            SUN ELECTRIC WORKS, INC., a Florida corporation,
                 and RELIABLE POWER SYSTEMS, INC.,
                              Appellees.

               Nos. 4D19-3467, 4D19-3468 and 4D19-3605

                              [April 14, 2021]

   Consolidated appeals from the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County; Edward L. Artau, Judge; L.T. Case Nos. 50-
2017-CA-009665-XXXX-MB and 50-2017-CA-010348-XXXX-MB.

    Ronald E. D’Anna of D’Anna Legal, PLLC, Boca Raton, for appellant.

   Jane Kreusler-Walsh, Rebecca Mercier Vargas, and Stephanie L.
Serafin of Kreusler-Walsh, Vargas & Serafin, P.A., West Palm Beach, and
Edward F. Holodak of Edward F. Holodak, P.A., Plantation, for appellees.

GROSS, J.

    Lenmar Realty, LLC, appeals from an amended final judgment entered
in two consolidated lower-court cases involving a commercial dispute with
its tenant, Sun Electric Works, Inc., and Reliable Power Systems, Inc.,
which also occupied the leased premises. We affirm the final judgment in
all respects but one—we reverse that portion of the judgment denying
Lenmar’s motion to obtain rental monies that Sun Electric deposited in
the court registry during the pendency of the litigation. 1

                                 The Lease

   Sun Electric was the tenant under a 2012 lease for two units of a
commercial warehouse in Boca Raton. The lease prohibited assignment
or subletting without the landlord’s written consent.

1 We also affirm without comment in Lenmar’s appeal of the post-judgment order
in case number 19-3605.
    The original lease term was five years and three months, with an option
to renew for three years. Lenmar became the landlord when it purchased
the warehouse in 2015. Sun Electric submitted a notice of lease extension
in 2016.

    The two units were originally set up as three bays, which could have
been leased as three separate units. The front of the space had three
different names over the bays, two of which are relevant to this appeal:
Sun Electric and Reliable Power Systems. Sun Electric provides garden-
variety electrical services, while Reliable Power Systems supplies standby
generators and installs liquid petroleum tanks and lines. Before the
litigation began, rent checks to Lenmar listed both “Reliable Power
Systems & Electrical Services” and “Sun Electric Works, Inc.”

                               The Dispute

    The dispute arose in July 2017. Lenmar’s property manager visited the
site and discovered various issues at the property that he attributed to
Reliable Power Systems.

   On July 14, 2017, Lenmar’s attorney sent a certified letter to Reliable
Power Systems, advising it that: (1) Lenmar objected to its unauthorized
occupancy of the leased units; (2) Lenmar considered the occupancy a
tenancy at will; and (3) if it wished to remain on the premises, it would be
required to sign a lease at the market rate, perform certain repairs, and
take other corrective actions.

    Sun Electric’s attorney responded to Lenmar’s letter, disputing the
allegations. Sun Electric’s attorney asserted that Reliable Power Systems,
Inc., was a corporation with no business operations, that all company
operations were through Sun Electric, and that Reliable Power Systems
was a fictitious name.

   When Reliable Power Systems failed to comply with Lenmar’s demands,
Lenmar notified Reliable of its intent to terminate the alleged tenancy at
will, effective August 31, 2017.

                  The Sun Electric v. Lenmar Lawsuit

   Before the August 31 deadline expired, Sun Electric filed a three-count
lawsuit against Lenmar. In Sun Electric’s amended complaint, it asserted
counts for breach of contract, declaratory judgment, and constructive
eviction.

                                     2
    Lenmar answered and raised various affirmative defenses, including
that (1) Sun Electric permitted an unauthorized tenant, Reliable Power
Systems, to occupy the leased premises, and (2) Sun Electric had failed to
pay rent into the court registry, entitling Lenmar to immediate possession
of the leased premises. Lenmar’s answer sought “the entry of a judgment
against [Sun Electric] ordering [Sun Electric] to go hence without day, and
an award of attorney’s fees and allowable costs.”

            The Lenmar v. Reliable Power Systems Lawsuit

   Reliable Power Systems failed to vacate the leased premises by the
August 31, 2017 deadline. Shortly thereafter, Lenmar sued Reliable Power
Systems for non-residential tenant eviction and damages. Lenmar’s
request for damages included double rent for each month Reliable Power
Systems held over in the leased premises. 2

   Lenmar’s lawsuit was transferred to the same division as Sun Electric’s
lawsuit and the cases were consolidated for all purposes.

         Sun Electric’s Rent Deposits into the Court Registry

   Lenmar began to reject Sun Electric’s rent checks because the checks
also listed Reliable Power Systems. Sun Electric moved to deposit rent in
the court registry. The trial court granted the motion by agreed order,
retroactive to September 2017.

                    Lenmar’s Motions to Disburse Rent

   Sun Electric and Reliable Power Systems vacated the leased premises
on July 6, 2018.

   Lenmar later moved to disburse the rents deposited into the court
registry and to compel the payment of the remaining rent balance due.
The trial court denied the motion without prejudice to Lenmar’s right to
address the issue at trial. Lenmar filed a renewed motion to disperse rents
deposited into the court registry.

2 Although we do not decide this issue, we note that Lenmar’s approach was not
the only way to address Reliable Power Systems’ possession of the premises. For
example, “[i]t is a well-settled principle of landlord-tenant law that a sublease
rises and falls with the master lease, and that a sublessee can take no greater
rights in demised property than its sublessor.” Thal v. S.G.D. Corp., 625 So. 2d
852, 853 (Fla. 3d DCA 1993). Lenmar might have included Sun Electric as a
party in the eviction lawsuit for violation of the subletting clause of the lease.

                                        3
                                The Trial

    The case proceeded to a non-jury trial.

   One of the main issues in contention was whether Reliable Power
Systems was a fictitious name for Sun Electric or instead was a separate
corporation. There was testimony that Sun Electric vacated the premises
on July 6, 2018, and the premises remained vacant until January 31,
2019.

                      The Original Final Judgment

    The trial court entered a final judgment ruling against Sun Electric on
its claims against Lenmar for breach of contract, declaratory relief, and
constructive eviction. The court found that Reliable Power Systems was a
separate legal entity with a separate business plan from that of Sun
Electric. The court ruled that Sun Electric breached the lease by
permitting Reliable Power Systems—an unauthorized occupant—to locate
on the leased premises without Lenmar’s consent. The court found that
Sun Electric failed to prove that it was constructively evicted or that
Lenmar anticipatorily breached the lease.

   The trial court ruled for Reliable Power Systems in Lenmar’s action for
eviction and damages. It found that the eviction claim was moot since
Reliable had already vacated the premises. As to the damages claim, the
court reasoned that there was no lease between Lenmar and Reliable
Power Systems, so there was no contractual basis to hold Reliable
responsible. The court rejected Lenmar’s claim that Reliable Power
Systems occupied the property under a tenancy at will, since Sun Electric
had a written lease for the units.

   Significantly for this appeal, the trial court denied Lenmar’s claim for
the rent deposited in the court registry because there was no counterclaim
or “other plead[ed] affirmative relief against Sun Electric.” The court
ordered that the deposited rental funds be returned to Sun Electric. 3

 Lenmar Was Entitled to Obtain the Rental Monies from the Court
Registry by Filing a Motion, Without Filing a Pleading Containing a
          Cause of Action Directed at Obtaining the Funds

3The court entered an amended final judgment that made some changes but
preserved the rulings discussed in this opinion.

                                     4
    The trial court erroneously concluded that Lenmar was not entitled to
the release of rents deposited into the court registry because it did not
assert such a claim in a pleading, but instead pursued the claim by pre-
and post-trial motions. Lenmar was entitled to assert a claim by motion
because entitlement to the rent deposits in the court registry was ancillary
to the asserted claims for relief.

    Under the Rules of Civil Procedure, a pleading is not the exclusive way
of seeking relief from the court. A litigant may also bring a motion setting
“forth the relief or order sought.” Fla. R. Civ. P. 1.100(b).

   The consolidated case involved a claim for possession of real property.
In such cases, there are often competing claims regarding rent that accrue
during the pendency of an action for possession. Chapter 83, Florida
Statutes (2018), entitled “Landlord and Tenant,” has established
procedures calling for the deposit of rent, as it accrues, during the
pendency of an action for possession into the registry of the court. §
83.232, Fla. Stat. (2018) (commercial tenancies); § 83.60(2), Fla. Stat.
(2018) (residential tenancies).

   Section 83.232, Florida Statutes, governs rent paid into the registry of
the court in actions for possession involving nonresidential tenancies:

      (1) In an action by the landlord which includes a claim
      for possession of real property, the tenant shall pay into
      the court registry the amount alleged in the complaint as
      unpaid, or if such amount is contested, such amount as is
      determined by the court, and any rent accruing during the
      pendency of the action, when due, unless the tenant has
      interposed the defense of payment or satisfaction of the rent
      in the amount the complaint alleges as unpaid. . . . If the
      landlord is in actual danger of loss of the premises or
      other hardship resulting from the loss of rental income
      from the premises, the landlord may apply to the court
      for disbursement of all or part of the funds so held in the
      court registry.

§ 83.232(1), Fla. Stat. (2018) (emphasis added).

    “Section 83.232 is designed to protect a commercial landlord from
irreparable harm where a tenant holds over during eviction proceedings
without paying rent.” Famsun Invest, LLC v. Therault, 95 So. 3d 961, 963
(Fla. 4th DCA 2012). The statute contains “no express limitation that the
claim for possession be based upon unpaid rent.” Misha Enters. v. GAR

                                     5
Enters., LLC, 117 So. 3d 850, 853 (Fla. 4th DCA 2013). Nor does the
statute require a litigant to file a claim for affirmative relief to obtain the
proceeds from the court registry.

   Section 83.232(1) states that a landlord “may apply to the court” for
disbursement of funds in the court registry. This language contemplates
that a landlord may assert a claim for disbursement of funds by motion
rather than by a pleading.

   Requiring the assertion of a claim in a pleading to obtain rental funds
in the court registry is contrary to the expedited procedure applicable in
landlord-tenant actions. Actions seeking removal of a commercial tenant
are subject to “the summary procedure provided” in section 51.011,
Florida Statutes (2018). § 83.21, Fla. Stat. (2018). Section 51.011
provides for limited pleadings with short response times. The requirement
of a separate pleading after a rental deposit order would necessarily slow
down and complicate what is supposed to be an expedited, simple process.
The point of a rental deposit statute is to secure rental monies in a neutral
place so that they can be quickly allocated and distributed by the court.
A landlord may apply by motion for disbursement of rental funds under
rule 1.100(b) in connection with a final disposition of the case.

    Here, there is no dispute that Sun Electric occupied the premises under
a lease until July 6, 2018. Until that time, Sun Electric paid into the court
registry the “rent accruing during the pendency of the action.” The trial
court ordered return of the rental payments to Sun Electric because
Lenmar had not pled for any affirmative relief against Sun Electric. This
order added insult to injury because Sun Electric had not pleaded for the
relief of any rebate or refund of the rent monies paid. Once the trial court
entered a final judgment in favor of Lenmar on Sun Electric’s causes of
action, Sun Electric had no possible claim to the money in the court
registry.

   For these reasons, we affirm in part, reverse in part and remand to the
circuit court for release of the funds in the court registry to Lenmar, or for
such other relief as may be proper.

   Affirmed in part, reversed in part, and remanded.

LEVINE, C.J., and KLINGENSMITH, J., concur.

                             *        *         *

   Not final until disposition of timely filed motion for rehearing.

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