Court Opinion

ID: 6321451
Source: CourtListenerOpinion
Date Created: 2022-03-09 16:03:01.453231+00
Date Added: 2024-06-11T08:13:22.503776
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

                       HALLANDALE PLAZA, LLC,
                             Appellant,

                                     v.

                   NEW TROPICAL CAR WASH, LLC,
                            Appellee.

                              No. 4D21-1445

                             [March 9, 2022]

   Appeal from the County Court for the Seventeenth Judicial Circuit,
Broward County; Tabitha Elise Blackmon, Judge; L.T. Case No. COSO-20-
8565.

  Kevin H. Fabrikant and Corey J. Biazzo of Fabrikant & Associates,
PLLC, Hollywood, for appellant.

    Holiday Hunt Russell of Holiday Hunt Russell PLLC, Fort Lauderdale,
for appellee.

CONNER, C.J.

    Hallandale Plaza, LLC (“the Landlord”) appeals the order dismissing its
eviction action against New Tropical Car Wash LLC (“the Tenant”). The
Landlord contends the trial court erred in: (1) denying due process by sua
sponte dismissing the eviction action on the Tenant’s preliminary motion
to determine rent; (2) finding the Tenant paid additional rent under duress;
(3) failing to consider that the Tenant’s payment of additional rent for a
period constituted a waiver of an alleged oral amendment to the written
lease removing the obligation of additional rent; and (4) misinterpreting
the written lease agreement. We reverse as to the first, second, and fourth
issues and remand for further proceedings, addressing the third issue to
the extent it is relevant on remand.

                               Background

   The Landlord acquired the rental property from a former owner, subject
to an existing written commercial lease between the prior owner and the
Tenant (“the Lease”). Subsequently, the Landlord filed a one-count
complaint for eviction against the Tenant, alleging that the Tenant failed
to pay the full amount of rent due under the Lease and the Landlord had
been assigned the rights under the Lease as the landlord.

    In its answer, the Tenant denied the allegation that it failed to pay rent
and asserted that it was current with its rental obligations. On the same
day the Tenant filed its answer, the Tenant also filed its motion to
determine rent pursuant to chapter 83, Florida Statutes. The motion
sought determination of the rent to be paid during the pendency of the
eviction action. The motion further asserted that not only was there no
rent due, but instead the Landlord owed the Tenant thousands of dollars
in “improper forced payments” of real estate taxes and operating expenses.

   The Lease was admitted into evidence at the hearing on the motion to
determine rent. The Lease required the Tenant to pay “base rent” and
“additional rent.” The base rent was a consistent monthly amount. The
additional rent was a proportionate share of “annual operating expenses”
and “annual taxes” incurred by the Landlord for the property. The Lease
provided that the Tenant’s proportionate share of additional rent would be
estimated before each lease year began, divided into twelve payments, and
payable monthly with the base rent. Each year, if the estimated amount
of additional rent proved to be inaccurate, the additional rent would be
adjusted accordingly.

   The evidence reflected that the Tenant’s base rent was in the court
registry and was current. However, the parties disagreed as to any
additional rent due. The Tenant’s representative testified to an oral
agreement with the original landlord, amending the Lease to remove the
Tenant’s obligation of additional rent. Evidence was presented that: (1)
prior to purchasing the property from the original landlord, the Landlord
expressed concern as to whether an amendment to the Lease terms had
been made such that would prevent it from enforcing the terms of the
Lease; (2) the Landlord was advised in writing that an oral agreement had
been made between the Tenant and original landlord that the Tenant
would not have to make those payments; and (3) because of the oral
modification agreement, the Tenant never paid operating expenses or real
estate taxes to the original landlord, and that for more than a year after
the Landlord purchased the subject property, the Landlord had not
charged him the additional rent.

   The Tenant’s representative testified that subsequently, the Landlord’s
director began harassing him to pay the real estate taxes and operating
expenses, explaining that the Landlord sent him a notice stating it would
take possession of the premises if the Tenant did not make the payments.

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The Tenant’s representative testified he did not have a choice, did not feel
comfortable, and was under a lot of pressure when he ultimately paid that
additional rent. Evidence was presented that the Tenant had a pending
small claims action to recoup the payments made for real estate taxes and
operating expenses due to the Landlord’s harassment.

   The Landlord presented evidence that while the original landlord
indicated it had orally agreed with the Tenant that the Tenant would not
have to pay additional rent, the Landlord nevertheless proceeded on the
Lease terms because the Lease clearly required a written addendum to
document a modification of the Lease and there was no written addendum.

   The Tenant argued to the trial court that the issue before it was the
Tenant’s responsibility for payment of operating expenses and that the
Lease was ambiguous. The Tenant maintained that while one portion of
the Lease generally referred to operating expenses as additional rent, a
specific definition of “operating expenses” in the Lease reflected that such
did not include real estate taxes. The Tenant argued that this conflict
made the Lease terms ambiguous and that the Lease should be construed
against the Landlord. The Tenant also argued that the Landlord stepped
into the shoes of the original landlord who had modified the Lease and not
charged for the additional rent, waiving any obligation on the part of the
Tenant to pay such expenses, and that this was expressed to the Landlord
prior to its purchase of the property.

   The Landlord argued that the Lease was not ambiguous, that additional
rent was defined as operating expenses and taxes, and that taxes not being
defined within “operating expenses” made sense.              The Landlord
maintained that the oral agreement between the original landlord and the
Tenant was not sufficient to constitute modification of the Lease, and that
the Tenant waived any right to claim it was not obliged to pay the taxes
and operating expenses when it made such payments in the past to the
Landlord.

   The trial court entered its order on the Tenant’s motion, wherein it
acknowledged that both parties agreed that the Tenant was current as to
the payment of base rent but disagreed as to whether “additional rent” was
outstanding. The trial court concluded that the Lease was ambiguous as
to what “additional rent” consisted of, noting that while the Lease’s
paragraph 3(c) provides for the payment of operating expenses, paragraph
3(d) defines “operating expenses” as not including “real property taxes.”
The trial court reasoned that, at a minimum, the issue of whether
“‘additional rent’ i.e. operating expenses,” encompassed real estate taxes

                                     3
was ambiguous and should be construed against the drafter as well as the
Landlord as the successor landlord.

    The trial court found that the Tenant was not required to pay additional
rent due to the oral agreement reached by the Tenant and the original
landlord, which the trial court determined amended the Lease. The trial
court found that the original landlord took no action to collect these
amounts and that the Landlord purchased the property with knowledge of
same, and that in fact, the Landlord did not raise the issue to the Tenant
until more than a year after the Landlord purchased the property. The
trial court rejected the Landlord’s claim that the oral agreement amending
the Lease was invalid under the Lease requirement that changes be in
writing and signed by both parties. The trial court instead relied on case
law holding that oral modification may be permissible despite a provision
requiring changes to be in writing where the oral agreement is accepted
and acted upon “in such [a] manner as would work a fraud on either party
to refuse to enforce.” King Partitions & Drywall, Inc. v. Donner Enters., Inc.,
464 So. 2d 715, 716 (Fla. 4th DCA 1985) (quoting Prof’l Ins. Corp. v. Cahill,
90 So. 2d 916, 918 (Fla. 1956)). The trial court concluded that such was
the case here, where even the Landlord recognized prior to its purchase of
the property that the Tenant and original landlord had amended the Lease
so that the Tenant would not be responsible for payment of “additional
rent.”

   The trial court also concluded that the Landlord harassed the Tenant
about the payment of additional rent and that the Tenant, under duress,
began paying additional rent.

    Based on the foregoing, the trial court ruled that the Tenant was
current with its monthly rental obligations and was not required to pay
“additional rent.” In addition, the trial court dismissed the case and
transferred it to the judge handling the Tenant’s small claim suit to
address any subsequent motions collateral to the dismissal.         The
Landlord’s motion for rehearing was denied and the Landlord gave notice
of appeal.

                             Appellate Analysis

Due Process

   The Landlord argues on appeal that it was denied due process when
the trial court sua sponte dismissed the eviction action upon ruling on the
Tenant’s motion to determine rent. More specifically, the Landlord argues
it was deprived of notice and opportunity to be heard on the issue of

                                      4
dismissal of the action. The Landlord maintains the purpose of the motion
authorized by statute is to provide a preliminary hearing to determine the
amount of rent to be deposited into the court registry during the pendency
of the eviction action. The Landlord points out that the Tenant did not
move or ask for dismissal and argues that “[a] trial court cannot dismiss a
cause of action without a pending motion or objection,” and thus “[i]t is a
due process violation for a trial court to sua sponte dismiss a claim without
notice or a hearing,” citing Bank of N.Y. Mellon Corp. v. Hernandez, 299 So.
3d 461, 463 (Fla. 3d DCA 2020). The Landlord also argues that the motion
to determine rent was not intended to serve as a vehicle for final
adjudication of eviction actions.

   Section 83.232, Florida Statutes (2020), concerns “Rent paid into
registry of court,” and provides:

      (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.

      ....

      (2) If the tenant contests the amount of money to be placed into
      the court registry, any hearing regarding such dispute shall be
      limited to only the factual or legal issues concerning:

      (a) Whether the tenant has been properly credited by the
      landlord with any and all rental payments made; and

      (b) What properly constitutes rent under the provisions of the
      lease.

§ 83.232(1)-(2), Fla. Stat. (2020) (emphasis added). The statute also
provides that a tenant’s failure to pay rent due into the court registry as
ordered operates as a waiver of a tenant’s defenses and entitles the
landlord to immediate default for possession. § 83.232(5), Fla. Stat.
(2020). The purpose of section 83.232 is “to protect a commercial landlord
from irreparable harm where a tenant holds over during eviction
proceedings without paying rent.” Lenmar Realty, LLC v. Sun Elec. Works,

                                     5
Inc., 317 So. 3d 125, 129 (Fla. 4th DCA 2021) (quoting Famsun Invest, LLC
v. Therault, 95 So. 3d 961, 963 (Fla. 4th DCA 2012)).

   At the hearing on the motion, the parties agreed the Tenant was current
on base rent payments, which the record reflects were being paid into the
court registry. The dispute was how much additional rent was due, if any.
Pursuant to section 83.232(2)(b), the trial court was to conduct an
evidentiary hearing limited to the factual and legal issues concerning
“[w]hat properly constitutes rent under the provisions of the lease.” §
83.232(2)(b), Fla. Stat. (2020). In this case, the trial court concluded after
the evidentiary hearing that no additional rent was due, as the Lease had
been modified to remove such obligation, and dismissed the action,
transferring any post proceeding motions to the pending small claims
action filed by the Tenant. The Landlord asserts that the trial court erred
in dismissing the action after the hearing and at most, the trial court
should have held, on a preliminary basis, that the Tenant did not have to
deposit additional rent into the court registry and should have allowed the
case to proceed to a proper trial on whether to grant eviction. We agree.

   Our decision in Rowe v. Macaw Holdings I, LLC, 248 So. 3d 1178 (Fla.
4th DCA 2018), is instructive. There, the lease described a credit to which
the tenant was entitled for partial destruction of the premises as a
reduction to “fixed rent.” Id. at 1179. Where the parties disputed the
amount of rent due after considering the credit, we held that the trial court
erred by failing to hold an evidentiary hearing under section 83.232(2). Id.
at 1180. We reasoned:

      This case fell under section 83.232(2)(b), which contemplates
      a hearing on “[w]hat properly constitutes rent” under a lease.
      The trial court was required to make at least a preliminary
      determination of the reduction, if any, to which the tenant was
      entitled regarding the deposit into the court registry required
      by section 83.232. Like the findings in a temporary relief
      hearing in a chapter 61 case, a finding at a section 83.232
      hearing can be modified after discovery and a final hearing on
      the merits.

Id. (alteration in original) (emphasis added). As such, in Rowe, we
compared a court’s findings on a motion to determine rent to be paid into
the court registry to findings on a motion for temporary relief in dissolution
of marriage proceedings, noting that such are required to be made
preliminarily and can be modified after discovery and a final hearing on the
merits. See id.

                                      6
   In the instant case, although the issues raised at the evidentiary
hearing on the motion to determine rent may have been the same issues
to be resolved at an eviction trial, review of the record reflects that
discovery had not yet occurred. Nor had the matter been set for a final
hearing on the merits. Rather, the Tenant filed its motion to determine
rent at the same time it filed its answer to the complaint. And while the
Landlord was given notice of the hearing itself, the notice did not reflect
that such hearing would be a final hearing or that dismissal of the action
was at issue. As such, the trial court erred in sua sponte dismissing the
action by denying the Landlord due process. Upon hearing the Tenant’s
motion to determine rent, the trial court was to make a preliminary
determination as to the factual and legal issues concerning what, if any,
additional rent was due to the court registry for the duration of the action
and nothing more.

Payment of Additional Rent Under Duress

   We agree with the Landlord’s arguments that there was no competent
substantial evidence to support the trial court’s finding that additional
rent was paid under duress.

    “When evaluating whether competent, substantial evidence supports a
trial court’s ruling, ‘[l]egal sufficiency . . . as opposed to evidentiary weight,
is the appropriate concern of an appellate tribunal.’” Stone v. Stone, 128
So. 3d 239, 240 (Fla. 4th DCA 2013) (alterations in original) (quoting
Brilhart v. Brilhart ex rel. S.L.B., 116 So. 3d 617, 619 (Fla. 2d DCA 2013)).

    “To establish duress, two factors must be proven: (1) that the act was
effected involuntarily and was not an exercise of free choice or will, and (2)
that this condition of mind was caused by some improper and coercive
conduct by the other side.” AMS Staff Leasing, Inc. v. Taylor, 158 So. 3d
682, 687 (Fla. 4th DCA 2015). As the Landlord notes, however, “it is not
improper and therefore not duress to threaten what one has a legal right
to do.” City of Miami v. Kory, 394 So. 2d 494, 498 (Fla. 3d DCA 1981).

      [A] threat to bring a civil action or to resort to remedies
      available under a contract is not such duress as will justify
      rescission of a transaction induced thereby. This is true even
      though it is subsequently determined that there is no legal
      right to enforce the claim, provided the threat is made in good
      faith, i.e., in the reasonable belief that a possible cause of
      action exists.

                                        7
Id. (quoting 13 Williston on Contracts § 1606, at 672-73 (3d ed. Jaeger rev.
1970)).

   In this regard, although the Tenant’s representative testified he was
under pressure and did not feel he had a choice when he made the
payments of additional rent due to the Landlord’s “harassment,” the only
harassment which the Tenant described was the Landlord threatening to
take possession of the leased premises, presumably by initiating an
eviction. Indeed, such was the nature of the “repeated threats” described
in the Tenant’s affirmative defense. However, the Landlord presented
sufficient evidence of a good faith basis to believe the Lease was not
properly modified. Thus, although the trial court found the Landlord was
not entitled to additional rent due to an oral agreement amending the
Lease, the Landlord’s threats to evict the Tenant do not meet the legal
requirements for “duress.”      Therefore, the record does not reflect
competent substantial evidence to support the trial court’s conclusion that
the Tenant’s payments of additional rent to the Landlord were made under
duress.

Waiver of the Amendment of Lease

    The Landlord also argues on appeal that the trial court failed to
consider that the Tenant’s conduct of paying the additional rent to the
Landlord prior to the Landlord’s eviction action constituted a waiver of the
Tenant’s prior oral agreement with the original landlord to remove
additional rent from the Tenant’s obligation. We disagree. Review of the
trial court’s order reflects that the trial court did not ignore the waiver
argument, but instead the trial court alternatively concluded that these
payments were made by the Tenant under duress. However, because we
reverse the trial court’s finding of duress, the trial court will be free to
consider any evidence and argument the Landlord presents on remand
regarding waiver.

Interpretation of the Lease

    Finally, the Landlord contends the trial court misinterpreted the Lease
by determining in part that the Tenant was not required to pay its share
of the real estate taxes on the leased property because of an ambiguity in
the language of the Lease.

   “It is a fundamental rule of contract interpretation that a contract
which is clear, complete, and unambiguous does not require judicial
construction.” Imagine Ins. Co., v. State ex rel. Dep’t of Fin. Servs., 999 So.
2d 693, 696 (Fla. 1st DCA 2008) (quoting Jenkins v. Eckerd Corp., 913 So.

                                      8
2d 43, 50 (Fla. 1st DCA 2005)). Accordingly, “[w]hen the language of a
contract is clear and unambiguous, courts must give effect to the contract
as written and cannot engage in interpretation or construction as the plain
language is the best evidence of the parties’ intent.” Talbott v. First Bank
Fla., FSB, 59 So. 3d 243, 245 (Fla. 4th DCA 2011). Regarding ambiguity,

      “[w]hether a document is ambiguous depends upon whether
      it is reasonably susceptible to more than one interpretation.”
      Detroit Diesel Corp. v. Atl. Mut. Ins. Co., 18 So. 3d 618, 620
      (Fla. 4th DCA 2009) (quoting Lambert v. Berkley S. Condo.
      Ass’n, 680 So. 2d 588, 590 (Fla. 4th DCA 1996)). “However,
      a true ambiguity does not exist merely because a document
      can possibly be interpreted in more than one manner.” Id.
      (quoting Lambert, 680 So. 2d at 590). “In construing the
      language of a contract, courts are to be mindful that ‘the goal
      is to arrive at a reasonable interpretation of the text of the
      entire agreement to accomplish its stated meaning and
      purpose.’” Murley v. Wiedamann, 25 So. 3d 27, 29 (Fla. 2d
      DCA 2009) (emphasis added) (quoting Taylor v. Taylor, 1 So.
      3d 348, 350 (Fla. 1st DCA 2009)).

Sidiq v. Tower Hill Select Ins. Co., 276 So. 3d 822, 827 (Fla. 4th DCA 2019).

   The relevant lease provisions at issue are paragraphs 3(c) and 3(d) of
the Lease. Paragraph 3(c) is titled “Additional Rent” and provides in
pertinent part:

      Tenant shall pay, as additional Rent (“Additional Rent”),
      prorated for the part of the Lease Term within the applicable
      calendar year, Tenant’s Percentage Share (“Tenant’s
      Percentage Share”), as hereafter defined, of the total amount
      of (i) the annual operating expenses (“Operating Expenses”),
      as hereafter defined and (ii) the annual taxes (“Taxes”) for the
      Building.

(emphasis added). Paragraph 3(d) defines material terms of the Lease, and
in defining the term “operating expenses,” paragraph 3(d)(I) states:
“Operating Expenses shall not include real property taxes.” The term
“Taxes” is also separately defined in paragraph 3(d)(III) to mean:

      [T]he gross amount of all . . . taxes . . . including all taxes
      whatsoever . . . attributable in any manner to the Building,
      the land on which the Building is located . . . or any charge
      or other amount required to be paid to any governmental

                                     9
         authority, whether or not any of the foregoing shall be
         designated ‘real estate tax,’ . . . or designated in any other
         manner.[1]

    Thus, we agree with the Landlord that the Lease’s plain language
reflects that additional rent is defined as the tenant’s percentage share of
the (1) annual operating expenses and (2) the annual taxes. While real
property taxes are excluded from the definition of operating expenses, they
are included in the definition of “taxes” which is the second component of
the additional rent defined by the Lease.

   In its order, the trial court may have equated the term “additional rent”
with “annual operating expenses,” as the trial court does not appear to
have analyzed the definition of the second component of the additional
rent, which was “annual taxes.” 2 Regardless, the Landlord is correct that

1   The full paragraph defining taxes is the following:

         (III)   The term “Taxes” shall mean the gross amount of all
         impositions, taxes, assessments (special or otherwise), water and
         sewer assessments and other governmental liens or charges of any
         and every kind, nature and sort whatsoever, ordinary and
         extraordinary, foreseen and unforeseen, and substitutes therefor,
         including all taxes whatsoever (except for taxes for the following
         categories which shall be excluded from the definition of Taxes: any
         inheritance, estate, succession, transfer or gift taxes imposed upon
         Landlord or any income taxes specifically payable by Landlord as a
         separate tax-paying entity without regard to Landlord’s income
         source as arising from or out of the Building and/or land on which
         it is located) attributable in any manner to the Building, the land on
         which the Building is located or the rents (however the term may be
         defined) receivable therefrom, or any part thereof, or any use
         thereon, or any facility located therein or used in conjunction
         therewith or any charge or other amount required to be paid to any
         governmental authority, whether or not any of the foregoing shall be
         designated “real estate tax”, “sales tax”, “rental tax”, “excise tax”,
         “business tax”, or designated in any other manner.

(emphasis added).

2 Presumably, the trial court may have been led astray by the parties’ use of the
terms. For instance, in the Landlord’s notice letter that preceded the eviction
suit, the Landlord advised the Tenant that the Tenant was responsible for paying
“operating expenses as additional rent,” citing Paragraphs 3(c) and 3(d) of the
Lease. Notably, the notice letter contained no mention of real property taxes.
Further confusion may have been caused by the testimony of the Landlord’s

                                          10
the Lease’s plain language does not reflect any ambiguity as to whether a
proportionate share of the real estate taxes were intended as additional
rent. Notably, without explaining its analysis, the trial court found
ambiguity against the Landlord and then proceeded to make its threshold
finding that the Lease was orally modified to remove the requirement to
pay additional rent. 3 We conclude the trial court erred in finding the Lease
ambiguous on the issue of a proportionate share of real estate taxes as
additional rent.

                                    Conclusion

    We reverse the trial court’s dismissal of the eviction action because it
violated the Landlord’s due process rights and because no competent
substantial evidence supported the trial court’s finding that the Tenant’s
payment of additional rent was made under duress. We further determine
that the trial court erred in finding the Lease was ambiguous as to whether
the additional rent provision required payment of a proportionate share of
real estate taxes. On remand, the trial court shall make appropriate
preliminary findings as to the amount of rent that the Tenant should pay
into the court registry while the eviction action is pending. The trial court
may entertain further evidence to resolve the motion to determine rent. As
to the effect of the preliminary nature of the remand ruling on the motion,
our opinion should be considered law of the case on the issue of duress;
however, the trial court may make a preliminary determination as to the
issue of oral modification of the Lease and waiver thereof. Our opinion
also should be considered as law of the case in resolving the eviction action
as to whether the Lease is ambiguous concerning the requirement of
additional rent to cover real estate taxes.

    Reversed and remanded with instructions.

FORST and KUNTZ, JJ., concur.

                               *         *          *

director that the Landlord was only charging the Tenant taxes and insurance as
additional rent and was not charging Tenant the operating expenses, even though
the Lease entitled it to do so.

3 The Landlord does not raise a specific challenge to the merits of the trial court’s
ultimate conclusion that the Lease language was modified by the oral agreement
between the Tenant and the original landlord so that the Tenant would not have
to pay any additional rent. Therefore, this issue is not before us.

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Not final until disposition of timely filed motion for rehearing.

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