Court Opinion

ID: 9903438
Source: CourtListenerOpinion
Date Created: 2023-11-27 15:36:22.73226+00
Date Added: 2024-06-11T09:22:16.024876
License: Public Domain

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                     FIFTH DISTRICT

                                  NOT FINAL UNTIL TIME EXPIRES TO
                                  FILE MOTION FOR REHEARING AND
                                  DISPOSITION THEREOF IF FILED

HERC RENTALS, INC.,

           Appellant,
                                        Case No. 5D22-1241
v.                                      LT Case No. 2020-CA-000645

SUPERIOR SITE SERVICES, INC. AND
CHAD D. LEE,

          Appellees.
________________________________/

Opinion filed March 3, 2023

Appeal from the Circuit Court
for Seminole County,
Nancy F. Alley, Senior Judge.

Heather A. DeGrave and Andrew W.
Peeler, of Walters Levine & DeGrave,
Tampa, for Appellant.

Eric W. Ludwig, of Law Office of Eric
W. Ludwig, Altamonte Springs, for
Appellees.

LAMBERT, C.J.
      The primary issue in this appeal concerns a continuing personal

guaranty executed by Chad D. Lee, one of the appellees, in favor of the

appellant, HERC Rentals, Inc. (“HERC”), regarding any amounts owed to

HERC by his business, Superior Site Services. The trial court entered final

judgment in favor of HERC after a nonjury trial, awarding it damages against

the co-appellee, Superior Site Services, Inc., in the sum of $42,618.16, for

monies owed to HERC on certain leased construction equipment. 1 The

court, however, adjudged that HERC take nothing on its guaranty claim

against Lee, individually, finding that the guaranty was “expired and of no

force and effect.”

      We affirm the judgment entered against Superior Site Services, Inc.,

without further discussion. As we explain, the judgment in favor of Lee is

reversed; and we remand to the trial court with directions for it to amend the

final judgment to show that Superior Site Services, Inc., and Lee are jointly

liable to HERC for the above awarded damages. 2

      1
          Superior Site Services, Inc., has not challenged this judgment.
      2
        In addition to HERC’s argument that the trial court erred in finding that
the guaranty had expired, HERC raises two other issues for reversal. We
affirm on these claims. See Hammond v. State, 34 So. 3d 58, 59 (Fla. 4th
DCA 2010) (citing Doorbal v. State, 983 So. 2d 464, 482–83 (Fla. 2008);
Shere v. State, 742 So. 2d 215, 217 n.6 (Fla. 1999)).

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BACKGROUND—

     In 2003, Lee registered the fictitious name of Superior Site Services

with the State of Florida. In these documents filed with the State, Lee listed

himself as the sole owner of Superior Site Services.

     In 2006, Lee, on behalf of Superior Site Services, sought to rent

construction equipment from HERC for use in Superior Site Services’s

grading and sitework business. As a condition for renting this equipment,

HERC required Lee to execute a credit application, which he did. This

document contained a continuing unconditional guaranty in which Lee

personally promised to pay to HERC all amounts that were either currently

owing or “which may hereinafter become owing.”          Lee also agreed to

promptly notify HERC in writing of any change in Superior Site Services’s

ownership, form, or structure, acknowledging that if he failed to notify HERC

of any such change, he “expressly assumes full responsibility for all charges

and/or credit extensions made on this account subsequent to such change.”

      HERC approved Superior Site Services’s credit application. It set up

an account under which Superior Site Services began leasing equipment

from HERC. Superior Site Services would thereafter receive invoices under

this account name and number for the monies that it owed to HERC.

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        In 2007, Lee changed the registration of the name Superior Site

Services with the State of Florida to show that his corporation, C. Lee, Inc.,

and not him personally, had become the sole owner of this fictitious name.

Prior to that, Lee had also incorporated the co-appellee, Superior Site

Services, Inc., of which he was both the sole owner and sole member of its

board of directors. Lee would later testify at trial that during this time, he

simultaneously used the fictitious name Superior Site Services for both C.

Lee, Inc., and Superior Site Services, Inc., in order to make the Superior Site

Services “entity” look “bigger.”

        C. Lee, Inc., was administratively dissolved by the State of Florida in

2011.     Thereafter, in 2016, Lee and HERC were in contact regarding

Superior Site Services’s rental of construction equipment for use in its

business.     Lee never advised HERC that Superior Site Services had

changed ownership or form, nor did he advise HERC, consistently with his

later defense at trial, that Superior Site Services was ostensibly different than

Superior Site Services, Inc.       Resultingly, HERC relied on the business

relationship that it had developed with Lee and Superior Site Services and

did not require that Lee execute a new credit application or a new guaranty,

which it would have otherwise required had Superior Site Services, Inc.,

been a new customer.        Superior Site Services, Inc., proceeded to rent

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equipment from HERC under the same account number that the fictitious

name, Superior Site Services, had used since 2006. Email exchanges

between HERC and Superior Site Services, Inc., used the same email

address previously used by the fictitious name first owned by Lee and then

owned by the since-dissolved C. Lee, Inc.

      The relationship between the parties continued until approximately

2017, when Superior Site Services, Inc., did not pay for monies it owed to

HERC for its rental of two track loaders and one trailer. HERC’s branch

manager contacted Lee about the outstanding balances owed, reminding

him of his personal guaranty to HERC to pay these debts. Lee did not

question or dispute the existence or the applicability of his prior guaranty, nor

did he indicate to HERC that he would not be liable under the guaranty for

these unpaid obligations because Superior Site Services, Inc., was an entity

separate and apart from Superior Site Services.

      HERC eventually sued Superior Site Services, Inc., in 2020 for, among

other things, breach of contract. Lee was sued in the same complaint for

breach of the guaranty agreement.          As previously mentioned, at the

conclusion of the bench trial, the trial court found that Lee’s personal

guaranty was “expired and of no force and effect”; thus, Lee was found to

not be personally liable to HERC for the damages determined by the trial

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court to be owed to it by Superior Site Services, Inc. HERC argues on appeal

that the trial court erred in finding that Lee’s continuing guaranty expired.

ANALYSIS—

      There is no dispute that Lee signed a continuing guaranty with HERC

and that, as established by his trial testimony, Lee never notified HERC of

any revocation of his personal guaranty. “The rule is that a continuing

guaranty remains in effect until revoked.” Causeway Lumber Co. v. King,

502 So. 2d 80, 81 (Fla. 4th DCA 1987) (citing Brann v. Flagship Bank of

Pinellas, N.A., 450 So. 2d 237, 239 (Fla. 2d DCA 1984)). Nevertheless,

Lee’s successful argument at trial was that once his corporation, C. Lee, Inc.,

was administratively dissolved by the State of Florida long before the

equipment rental transactions with HERC at issue, he was released from the

personal guaranty or, at the very least, the guaranty was no longer in effect.

      In Sheth v. C.C. Altamonte Joint Venture, 976 So. 2d 85 (Fla. 5th DCA

2008), this court listed the following four factors to consider as to whether a

guarantor should be released from a guaranty:

      1. “the obligee’s lack of knowledge of a change in the obligor’s
         business”;

      2. “the nature of the change of the obligor business”;

      3. “whether the guarantor participated in the change in the obligor
         business”; and

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      4. “whether the guarantor sought to revoke the guaranty.”

Id. at 88–89.

      Applying these factors to the undisputed evidence at trial, Lee testified

that he never sought to revoke the guaranty prior to the suit being filed.

Moreover, HERC lacked knowledge that the ownership or structure of

Superior Site Services changed. Additionally, Lee was the person who

owned and operated Superior Site Services first in his individual name, and

who later participated in this name being used by his two corporations, C.

Lee, Inc., and Superior Site Services, Inc. As previously mentioned, Lee’s

trial testimony showed that he simultaneously used the name Superior Site

Services for both C. Lee, Inc., and Superior Site Services, Inc., in order to

portray Superior Site Services as a “bigger entity.” Lastly, C. Lee, Inc., and

Superior Site Services, Inc., both performed grading and sitework under the

name Superior Site Services.

      Under these specific circumstances, we find that the trial court

reversibly erred when it concluded that Lee’s continuing personal guaranty

with HERC had “expired.” Accordingly, we reverse that part of the final

judgment holding that HERC take nothing on its action against Lee. We

remand with directions to the trial court that it amend its final judgment to

                                      7
show that Lee is jointly liable with the co-appellee, Superior Site Services,

Inc., for the $42,816.68 in damages awarded to HERC.

     AFFIRMED, in part; REVERSED, in part; REMANDED, with directions.

MAKAR and HARRIS, JJ., concur.

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