Court Opinion

ID: 9838421
Source: CourtListenerOpinion
Date Created: 2023-09-06 14:05:04.245017+00
Date Added: 2024-06-11T18:03:09.275644
License: Public Domain

DISTRICT COURT OF APPEAL OF FLORIDA
                        SECOND DISTRICT

     CERTIFIED MOTORS, LLC, a Florida limited liability company;
                   and JOSEPH ELNAGGAR,

                               Appellants,

                                    v.

        AVENTINE HILL, LLC, a Florida limited liability company;
                   and MANUEL DELGADO, JR.,

                                Appellees.

                             No. 2D22-2306

                           September 6, 2023

Appeal from the Circuit Court for Hillsborough County; Cheryl K.
Thomas, Judge.

George A. Vaka and Nancy A. Lauten of Vaka Law Group, P.L., Tampa;
and Liben M. Amedie of The Liben Law Firm, Tampa, for Appellants.

Stacy D. Blank, Paul A. McDermott, and Daniel L. Buchholz of Holland &
Knight LLP, Tampa, for Appellee Aventine Hill, LLC.

No appearance for remaining Appellee.

LaROSE, Judge.
     Certified Motors, LLC, appeals a summary judgment entered in
favor of Aventine Hill, LLC. The trial court found the parties' commercial
lease renewal option unenforceable. We have jurisdiction. See Fla. R.
App. P. 9.110(k) ("Review of Partial Final Judgments.").1 Having carefully
reviewed the record, and with the benefit of oral argument, we reverse.2
                               Background
     Certified entered into a commercial lease to operate a car repair
and sales business. Rent was $5,000 per month. The lease included a
five-year renewal option:
     TERM. The term of this Lease shall begin on January 1,
     2017, and last until December 31, 2022. Tenant can
     exercise an option for an additional 5[-]year period if
     given in writing to the owner 90 days before the term
     expiration.
(Second emphasis added.)
     Several months later, Aventine purchased the leased premises,
thereby becoming Certified's landlord.
     The parties' relationship was rough from the start. Aventine
accused Certified of breaching the lease in a variety of ways. Certified
denied the accusations. Eventually, Aventine sued Certified.

     1 The judgment granted declaratory relief on Count V of Aventine's

second amended complaint. This is an appealable partial final judgment
because the facts underlying Count V are distinct from those
undergirding Aventine's remaining four counts. See generally Dahly v.
Dep't of Child. & Fam. Servs., 876 So. 2d 1245, 1248 (Fla. 2d DCA 2004)
("When an appeal is taken from a summary judgment that does not
dispose of all of the parties or causes of action in a lawsuit, this court
applies a three-part test to determine our authority under rule 9.110(k)
to review the judgment: (1) Could the cause of action disposed of by the
partial summary judgment be maintained independently of the other
remaining causes of action? (2) Were one or more parties removed from
the action when the partial summary judgment was entered? (3) Are the
counts separately disposed of based on the same or different facts?").

     2 Because of our disposition, we do not reach Certified's estoppel

argument.
                                     2
      Thereafter, Certified timely informed Aventine that it "ha[d] elected
to extend the terms of the Lease for an additional 5-year period."
Aventine amended its complaint to seek a declaration that the renewal
option was unenforceable. See generally § 86.011, Fla. Stat. (2021)
(delineating the trial court's jurisdiction to render declaratory
judgments).
      Aventine moved for summary judgment on the declaratory
judgment count. It argued that the renewal option "does not define an
amount of agreed rent, does not provide that rent will be at the same
amount as rent during the initial term, and does not provide for any
agreed mechanism to determine a new rate of rent." Thus, according to
Aventine, the renewal option lacked essential terms.
      Aventine's argument won the day. In granting summary judgment,
the trial court explained:
            The commercial lease agreement fails to define all
      essential and material terms that would apply during a
      renewal period. It fails to define the amount of rent to be paid
      by the tenant, fails to state that rent during the renewal term
      will be at the same amount as rent during the initial term,
      and fails to provide how the amount of rent would be
      determined or agreed upon by the parties during a renewal
      term.
The trial court was clearly troubled by the below-market rent that the
original landlord charged. The trial court explained that "[i]t is in
defiance of logic to assume that a landlord would enter into a contract
that would not even allow a claim for market rent."3 The trial court
stayed the action pending appeal.

      3 Certified allegedly expended over $300,000 to improve the leased

property. In exchange, the original landlord offered a favorable monthly
rent. We take no position as to the amount charged. Instead, we focus
on the enforceability of the renewal option. Cf. KRG Oldsmar Project Co.
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                                  Analysis
      Florida's summary judgment rule provides that "[t]he [trial] court
shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law." Fla. R. Civ. P. 1.510(a).
      We review the trial court's summary judgment de novo. See Lee
Cnty. Elec. Coop., Inc. v. City of Cape Coral, 159 So. 3d 126, 127 (Fla. 2d
DCA 2014) ("In the declaratory judgment proceeding, the City and LCEC
filed cross-motions for summary judgment. The circuit court determined
that the facts were undisputed, and it ruled in the City's favor . . . . Our
review of the summary judgment is de novo."). Our review of the trial
court's interpretation of the lease terms is also de novo. See Bethany
Trace Owners' Ass'n v. Whispering Lakes I, LLC, 155 So. 3d 1188, 1191
(Fla. 2d DCA 2014) ("We review the trial court's interpretation of a
contract de novo. Because the interpretation of a contract is a question
of law, this court may reach a construction or interpretation of the
contract contrary to that of the trial court." (citations omitted)).
      Certified argues that where a renewal option is silent as to some
terms, the option remains enforceable. In such an instance, Certified
tells us that the renewal option embraces the terms of the original lease.
      Aventine contends that an enforceable renewal option must specify
either the rent for the renewal term (or at least affirmatively declare the
rental amount to be the same as during the initial lease period) or a
definite procedure to establish a new rental amount.

v. CWI, Inc., 358 So. 3d 464, 468 (Fla. 2d DCA 2023) ("[T]he court's role
is to enforce the contract as written, not to rewrite the contract to make
it more reasonable for one of the parties." (quoting Snyder v. Fla. Prepaid
Coll. Bd., 269 So. 3d 586, 592 (Fla. 1st DCA 2019))).
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      Indisputably, the renewal option omits both a rental amount and a
definite procedure to establish the rent. The parties, however, disagree
over the import of these omissions; whether and what terms must be
included in an enforceable renewal option.
I.    Lack of Essential Contract Terms
      "[W]hen contracting parties do not agree on an essential provision
there is no 'meeting of the minds' that is the essence of a contract,
and . . . it is not the province of the court to make the contract or to
supply material terms or provisions omitted by the parties." Edgewater
Enters., Inc. v. Holler, 426 So. 2d 980, 982 (Fla. 5th DCA 1982). Failure
to include essential terms is generally fatal to a contract's enforceability.
See Davis v. Hearthstone Senior Cmtys., Inc., 155 So. 3d 1232, 1234 (Fla.
2d DCA 2015) ("[A] contract cannot stand if it is missing the essential
terms of an agreement." (quoting Greenbrook NH, LLC v. Est. of Sayre,
150 So. 3d 878, 878 (Fla. 2d DCA 2014))).
      Aventine cites to several cases echoing these general propositions.
For instance, in Jahangiri v. 1830 N. Bayshore, LLC, 253 So. 3d 699, 702
(Fla. 3d DCA 2018), the Third District noted that
      [t]he amount of rental is an essential element of a lease, if not
      the basis for a lease, and an agreement to make a lease, or to
      renew or extend a lease, that fails to specify either the
      amount of the rental or a definite procedure to be followed to
      establish the amount of the rental, is too indefinite to be
      legally binding and enforceable.
(Quoting Edgewater Enters., Inc., 426 So. 2d at 983.)
      More recently, in FM3 Liquors, Inc. v. Bien-Aime, 319 So. 3d 706,
707-08 (Fla. 3d DCA 2021), the Third District held that the landlord was
entitled to immediate possession of the property following expiration of
the lease. The court explained that "renewal is foreclosed by this court's

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recent opinion in Jahangiri" where the renewal option omitted the rent
amount or a definite procedure to establish the rent amount. Id. at 707.
     Similarly, in LaFountain v. Estate of Kelly, 732 So. 2d 503, 503-04
(Fla. 1st DCA 1999), the First District affirmed a trial court's order
determining that a renewal option was unenforceable. The court held
that "[t]he renewal option in the instant case did not specify the rental
amount or a method for reaching agreement on the rent, and the option
was thus unenforceable once the parties failed to agree to an essential
element of the lease." Id. at 505.
     These cases teach that "[w]here essential terms of an agreement
remain open, and subject to future negotiation, there can be no
enforceable contract." Dows v. Nike, Inc., 846 So. 2d 595, 602 (Fla. 4th
DCA 2003). Black letter law tells us that "an 'agreement to agree' is
unenforceable as a matter of law." ABC Liquors, Inc. v. Centimark Corp.,
967 So. 2d 1053, 1056 (Fla. 5th DCA 2007).
     For instance, in John Alden Life Insurance Co. v. Benefits
Management Associates, Inc., 675 So. 2d 188, 189 (Fla. 3d DCA 1996),
the Third District held that a contractual provision to negotiate a bonus
payment in the future "was merely an 'agreement to agree' in the future
about the bonus and hence unenforceable as a matter of law."
     Legal commentaries echo this proposition in the context of a real
estate renewal option:
            Although a promise may be sufficiently definite when it
     contains an option given to the promisor or the promisee, if
     an essential element is reserved for the future agreement of
     both parties, as a general rule the promise can give rise to no
     legal obligation until such future agreement. Since either
     party in such a case may, by the very terms of the promise,
     refuse to agree to anything to which the other party will agree,
     it is impossible for the law to affix any obligation to such a
     promise.

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            On this ground, courts have traditionally refused to
      enforce agreements to agree in contracts dealing with real
      property; thus leases containing renewal covenants leaving
      the renewal rental for the future agreement of the parties
      have generally been held unenforceable for indefiniteness and
      uncertainty.
1 Williston on Contracts, § 4:29, at 851-54 (Richard A. Lord, 4th ed. 2007)
(footnotes omitted); see also May v. Sessums & Mason, P.A., 700 So. 2d
22, 26-27 (Fla. 2d DCA 1997) ("In the process of negotiating an
agreement, a term that is frequently left indefinite and to be settled by
future agreement, or by some other specified method, is the price in
money—the compensatory exchange for the subject matter of purchase.
This is true both of agreements for the rendition of service and of those
for the purchase, sale, or leasing of realty or goods. If the parties provide
a practicable method for determining this price or compensation there is
no such indefiniteness or uncertainty as will prevent the agreement from
being an enforceable contract. The same is true if they agree upon
payment of a 'reasonable' price or compensation. There are cases,
however, in which it is clear that the parties have not expressly or
implicitly agreed upon a 'reasonable price,' and also have not prescribed
a practicable method of determination. Where this is true, the agreement
is too indefinite and uncertain for enforcement." (quoting 1 Corbin on
Contracts, § 4.3, at 567 (Joseph M. Perillo, Rev. ed. 1993))).
      In Edgewater, 426 So. 2d at 981, the Fifth District identified "[t]he
issue in this case [a]s whether a renewal provision in a lease, which
specifies the length of the term of the renewal but leaves the amount of
the monthly rental during the renewal period to be negotiated," was
"sufficiently definite to be legally enforceable." Specifically, that lease
renewal option provided that

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      [t]enant shall have the option to take a renewal lease of the
      demised premises for the further term of three (3) years from
      and after the expiration of the term herein granted at a
      monthly rental to be arbitrated, negotiated and determined
      among the parties to this lease at said time.
Id. Importantly, for our purposes, the Edgewater court observed that
      where the contract clause provides that the lessee shall have
      an option to renew for a specific period of time, but is silent
      as to all other terms, the clause has generally been held
      sufficiently definite to enforce and construed as
      encompassing the same terms and rent as the original lease.
The Edgewater court concluded that the renewal option was
unenforceable because there was no meeting of the minds about the
rent. Id. at 982. The parties anticipated future negotiations. Id. at 983.
II.   Silence is Golden
      Having briefly outlined some contours of contract formation and
enforceability, we introduce the concept of silence. The language used
(or not used) in a renewal option has profound legal implications. See id.
at 981 ("Options to renew can be worded in various ways, but what may
seem to be negligible semantic differences can have a dramatic difference
in the construction the court places on the particular clause."). Where
the renewal option says nothing about the rent payable during the
renewal period, the silence, as a matter of law, dictates that the same
rent will carry over into the renewal period. Silence tells us what rent
will be paid.
      Aventine seemingly believes this approach is too facile. But
Aventine ignores the fact that "[a] lease renewal involves a continuation
of the landlord-tenant relationship on the terms specified in the option to
renew, or if no terms are specified, then '[a] lease renewal connotes a
continuation of the landlord-tenant relationship on the same terms
as the original lease.' " Woodard Tire Co. v. Hartley Realty Inc., 596 So.

                                     8
2d 1114, 1116 (Fla. 3d DCA 1992) (alteration in original) (emphasis
added) (quoting Strano v. Reisinger Real Est., Inc., 534 So. 2d 1214, 1215
(Fla. 3d DCA 1988)); see also Goldbloom v. J.I. Kislak Mortg. Corp., 408
So. 2d 748, 750 (Fla. 3d DCA 1982) ("[A]n otherwise silent agreement
simply to renew an existing lease implies that the renewed term is for the
same rental as the existing one. . . . ['W]hen there are no terms stated in
the option [to renew the lease] the parties (are deemed to) contemplate
that the lease will be renewed on the same terms in the original
agreement.' " (citations omitted) (quoting Crossman v. Fontainebleau
Hotel Corp., 273 F.2d 720, 727 (5th Cir. 1959))).
     Aventine's insistence that the renewal option include either the
rental amount during the renewal term or a definite procedure to
establish the rent finds no support in the case law. By saying nothing
about the rent, the renewal option adopts the original rental amount:
     Where the parties to a lease did not leave the rental amount
     for the lease renewal period open to negotiation, the court
     looks to the terms of the original lease, based on the premise
     that once the renewal option is exercised, the original lease is
     deemed a unitary one for the extended term.
49 Am. Jur. 2d Landlord & Tenant § 138 (2023); e.g., Woodard Tire Co.
Inc., 596 So. 2d at 1116; Goldbloom, 408 So. 2d at 750. Aventine ignores
this unique "unitary" character. Exercise of the renewal option "does not
create a new lease; rather it is a prolongation of the original agreement
for a further period. Once the option is exercised, the original lease is
deemed a unitary one for the extended term and a new lease is not
necessary." Dime Sav. Bank of N.Y. v. Montage St. Realty Assocs., 686
N.E.2d 1340, 1342 (N.Y. 1997). Certified's renewal option is not lacking.
By virtue of its silence, the lease terms apply to the renewal option with
equal force and effect, as though restated therein. See Idol v. Little, 396
S.E.2d 632, 634 (N.C. Ct. App. 1990) ("[A]n optional renewal provision in
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a lease which is silent on the amount of rent due upon renewal of the
lease and which does not provide that the renewal rent will be set by the
parties' future agreement is valid and enforceable, and the amount of
rent due upon renewal is impliedly the amount of rent due under the
original lease.").
III.   Aventine's Lack of Authority
       Although enlightening, Aventine's cases are inapposite. The cases
do not deal with the critical fact we have here: silence as to the renewal
rent defaults to the original rental amount. Further, the cases involve
renewal options anticipating more negotiations or without adequately
defining a way to arrive at the rent amount. They advance no compelling
support for Aventine's position.
       As recounted earlier, for instance, the renewal option in Edgewater
required the "monthly rental to be arbitrated, negotiated and determined
among the parties to this lease" upon the lessee's exercise of the renewal
option. Edgewater, 426 So. 2d at 981. This classic, and unenforceable,
agreement to agree on an essential term, is absent from Certified's
original lease.
       Aventine urges us to read Edgewater as categorically requiring that
a renewal option include either the amount of rent or a definite
procedure to establish the rent. But the issue framed by the Fifth
District was much narrower: whether a renewal option that "leaves the
amount of the monthly rental during the renewal period to be negotiated,
[wa]s sufficiently definite to be legally enforceable." Id. (emphasis added).
Edgewater stands for the rather unremarkable proposition that an
agreement to agree on an essential term is no agreement at all.
Consequently, we cannot adopt Aventine's sweeping reading of
Edgewater. Cf. Pedroza v. State, 291 So. 3d 541, 547 (Fla. 2020) ("A

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holding consists of those propositions along the chosen decisional path
or paths of reasoning that (1) are actually decided, (2) are based upon the
facts of the case, and (3) lead to the judgment." (quoting State v. Yule,
905 So. 2d 251, 259 n.10 (Fla. 2d DCA 2005) (Canady, J., specially
concurring))).
     Similarly, the renewal option in LaFountain, 732 So. 2d at 504,
provided:
     The Lessor grants to the Lessee the option to renew said lease
     for two additional periods of five (5) years each, provided
     written notice of the intent to exercise the option is given at
     lease [sic] ninety (90) days before the expiration of the original
     term. In the event Lessee exercises its option to renew,
     the lease payment for the renewal period will be
     negotiated between the parties.
(Emphasis added.) Once again, this is an unenforceable "agreement to
agree."4
     In Jahangiri, 253 So. 3d at 701, the renewal option stated:
     RENEWAL OPTIONS: Upon six months notice and provided
     [lessee] is not in default of any provision of this Lease,
     LESSOR agrees that [lessee] may renew this Lease for two
     five-year renewal options, each renewal at the then
     prevailing market rate for comparable commercial office
     properties.
(Emphasis added). The Third District concluded that "renewal at the
then prevailing market rate for comparable commercial office properties"

     4 At oral argument, Aventine maintained that the cases it relied

upon all stood for the proposition that "the parties did not say enough."
We disagree. Silence in a renewal option represents continuation of the
original lease terms. An agreement to agree injects ambiguity and
uncertainty, anathema to the certainty necessary for contract formation.
Correspondingly, when pressed, Aventine conceded that there was no
authority holding that a lease renewal provision's silence (or failure to
repeat or include essential terms) ipso facto rendered it unenforceable.

                                     11
was too indefinite to be enforceable as "the lease does not provide for the
amount of renewal rent, the procedure for determining rent has to be
definite enough, without further negotiation or litigation on the
methodology used, to fix the rent with certainty." Id. at 703. The Third
District recited a litany of considerations that made the renewal option
ambiguous, uncertain, and, therefore, unenforceable. Id. at 703-04
("[T]here is still more for the parties to decide before the rent could be
fixed with certainty. Who is responsible for obtaining the 'comparables'?
Must the lessor or the lessee provide the comparables? May the other
party object and who will resolve any such objections? There are also
issues as to the validity of the comparables. What factors are to be
considered in determining that another property is truly comparable? Is
it the square footage of the space, its location, its condition, its use, or
must other factors also be considered? And what is the 'prevailing
market rate'? Is it the mean, medium, or mode of the three comparable
commercial properties? Is it the highest or lowest price of the
comparables? Is it the comparable sales rate or the rental rate that sets
the 'market'?").
      None of these uncertainties lurk here. Nothing in the renewal
option is left unsettled.
      In FM3 Liquors, 319 So. 3d at 708, the Third District confronted the
following lease renewal provision:
      This Lease shall renew with 90 day prior notice from tenant
      for an additional period of five years renewal term, unless
      tenant gives written notice of termination no later than 90
      days prior to the end of the term or renewal term. . . . The
      lease terms during any such renewal term shall be the same
      as those contained in this Lease except that the lease
      installment payments shall be current market value at
      the time of the renewal.

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(Emphasis added.) Relying on Jahangiri, the FM3 Liquors court
concluded that the option was uncertain.5 Id. at 707. None of these
uncertainties arise in Certified's renewal option. Quite simply, less is
more.
     One last point merits discussion. Aventine tells us that because
real estate values fluctuate, "courts cannot assume the parties would
have agreed to the same terms during a renewal period simply because
the parties previously agreed to those terms multiple years ago."
Aventine chides that "[w]here a contract is silent as to a particular
matter, the trial court should not impose on the parties contractual
rights and duties that they themselves have omitted." (Quoting Carefree
Vills., Inc. v. Keating Props., Inc., 489 So. 2d 99, 102 (Fla. 2d DCA 1986).)
Aventine would have us rewrite the original lease, finding perceived gaps
in contract terms. We decline this invitation to judicial mischief.

     5 The FM3 Liquors court cited the Edgewater language quoted in

Jahangiri:
      Renewal is foreclosed by this court's recent opinion in
      Jahangiri[] ("[T]he amount of rental is an essential element of
      a lease, if not the basis for a lease, and an agreement to make
      a lease, or to renew or extend a lease, that fails to specify
      either the amount of the rental or a definite procedure to be
      followed to establish the amount of the rental, is too indefinite
      to be legally binding and enforceable." (quoting Edgewater[,
      426 So. 2d at 983])).
FM3 Liquors, 319 So. 3d at 707 (second alteration in original). However,
as detailed above, a renewal option is not per se unenforceable simply
because it omits the amount of rent. Indeed, in Goldbloom, 408 So. 2d at
750, the Third District approvingly recited the doctrine "that when there
are no terms stated in the option [to renew the lease] the parties (are
deemed to) contemplate that the lease will be renewed on the same terms
in the original agreement.' " (Quoting Crossman, 273 F.2d at 727.)

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     As landlord, Aventine is bound by the lease terms. We refuse to
inject uncertainty into a commercial contract where none is found on its
face. See Razin v. A Milestone, LLC, 67 So. 3d 391, 396 (Fla. 2d DCA
2011) ("[W]here there is 'an unambiguous contractual provision . . . a
trial court cannot give it any other meaning beyond that expressed and
must construe the provision in accord with its ordinary meaning.' "
(quoting Emergency Assocs. of Tampa v. Sassano, 664 So. 2d 1000, 1003
(Fla. 2d DCA 1995))).
                                Conclusion
     The trial court erred in declaring the parties' lease renewal option
unenforceable.
     Reversed and remanded.

ATKINSON and SMITH, JJ., Concur.

Opinion subject to revision prior to official publication.

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