Mori v. Matsushita Elec. Corp. of America

• Citation: 380 So.2d 461
• Decision Date: 29 January 1980
• Docket Number: No. 78-2091,78-2091
• Parties: Eugene E. MORI d/b/a Mori Enterprises, Appellant, v. MATSUSHITA ELECTRIC CORPORATION OF AMERICA, a Foreign Corporation d/b/aPanasonic, Appellee.
• Court: Court of Appeal of Florida (US)

Page 461

380 So.2d 461

Eugene E. MORI d/b/a Mori Enterprises, Appellant, v. MATSUSHITA ELECTRIC CORPORATION OF AMERICA, a Foreign Corporation d/b/aPanasonic, Appellee.

No. 78-2091.

District Court of Appeal of Florida, Third District.

Jan. 29, 1980.

Rehearing Denied March 10, 1980.

Papy, DuVal, Poole & Usich and Harvey DuVal, Coral Gables, for appellant.

August, Gassen, Pohlig & Milstein and Joseph Gassen, Miami, for appellee.

Before HENDRY, HUBBART and NESBITT, JJ.

NESBITT, Judge.

This is an appeal and a cross-appeal from a final judgment entered in an action for breach of contract.

For convenient reference, the appellant will be referred to as "Mori" and cross-appellant, Matsushita Electric Corporation of America, a foreign corporation, d/b/a Panasonic as "Panasonic."

The record reveals that in October of 1972, Mori and Panasonic entered into a written agreement whereby Mori agreed to build, according to specifications, 40,000 square feet of warehouse space and lease the same to Panasonic for a term of ten years. The agreement did not provide for a delivery date. Thereafter, on March 9, 1973, the parties entered into an addendum to the original agreement providing that construction would commence "forthwith" and Mori was to deliver to Panasonic the warehouse space not later than July 23, 1973. ¹ Mori developed more expansive plans to construct a 100,000 square foot warehouse complex which embraced that space to be built and leased to Panasonic. Panasonic had an option to lease an additional 20,000 square feet effective two years from the delivery date. As of April 10, 1973, Mori had neither obtained financing nor a building permit. Panasonic, having become concerned over the completion date, forwarded a letter to Mori dated April 10, 1973 stating that unless visible construction was commenced by April 19, 1973 it would repudiate the agreement. Mori immediately began the placement and compaction of fill upon the proposed construction site.

On April 24, 1973, Panasonic demanded that Mori enter into a further written agreement requiring adherence to strict construction schedules. Mori refused and Panasonic immediately repudiated the agreement as modified. In May of 1973, Panasonic entered into an agreement for construction of similar facilities with another party in the same industrial complex and ultimately obtained occupancy thereof during late November 1973.

On July 17, 1973, Mori commenced an action for breach of contract seeking, by amended complaint, damages against Panasonic. In its answer, Panasonic denied the material allegations of the amended complaint and, by affirmative defense, alleged that it was Mori who had breached the contract. Panasonic counter-claimed for the return of its security deposit as well as costs and damages. The issues of liability and damages were bifurcated.

In the chronology, it is pertinent to first consider the cross-appellant's points on appeal.

I

In a non-jury trial, the court resolved the issue of liability in favor of Mori holding that Panasonic had breached the contract by rescinding same on April 24, 1973. Panasonic claims it should not have been held liable for terminating the agreement. It contends that it was reasonable to conclude that Mori had committed a prospective breach of the contract.

A prospective breach of the contract occurs when there is absolute repudiation by one of the parties prior to the time when his performance is due under the terms of the contract. Such a repudiation may be evidenced by words or voluntary acts but the refusal must be distinct, unequivocal, and absolute. ²

The trial court did not find a repudiation by Mori nor did it find that Mori had indicated an intent to abandon the contract by placing himself in a position which would render it impossible for him to comply with the contract. See Harper v. Bronson, 104 Fla. 75, 139 So. 203 (Fla.1932); Hall v. Northern & Southern Co., 55 Fla. 235, 46 So. 178 (Fla.1908). The findings of the trial court arrive here clothed with the presumption of correctness and where the evidence, although conflicting, is not found to be clearly erroneous, the trial court's findings will not be disturbed. Mart v. Leibman, 281 So.2d 367 (Fla. 3d DCA 1973); Cic Leasing Corp. v. Dade Linen and Furniture Co., 279 So.2d 73 (Fla. 3d DCA 1973); Harbor Yacht Repair, Inc. v. Sanger, 279 So.2d 64 (Fla. 3d DCA 1973).

The issue of damages was subsequently tried, also non-jury, and that proceeding culminated in a final judgment entered by the trial court on September 1, 1978. That judgment, provided that Mori was to recover from Panasonic the sum of $45,745.96 which represented Mori's loss of profits. That figure was arrived at by taking the actual profit which Mori would have received had both parties been required to complete the contract, that is, total rental and other monies Mori was to receive for the ten-year term of the contract minus the expenses which Mori would have incurred in carrying out the terms of the ten-year lease and completing the warehouse by July 23 as prescribed by the agreement as amended on March 9, 1973. As part of the expenses which Mori would incur under the contract, the trial court included the sum of $222,030.70 which it found to be the additional costs Mori would have had to expend to complete the entire 100,000 square foot structure by the July 23, 1973 completion date. Also included in the expenses Mori would have incurred were: (1) management and maintenance costs; (2) insurance; and (3) a financing fee.

In the trial court, as on appeal, the parties are in total disagreement as to the proper measure of damages to be applied. Panasonic, in the lower court and in this cross-appeal, takes the position that the transaction should have been treated as though it were a conveyance between the parties and consequently damages based on "benefit of the bargain," applicable between landlord and tenant, should have been applied. Mori urges that the measure to be applied was loss of profits. Loss of profits is a proper measure for damages resulting from the anticipatory breach of a contract. "This is especially true where the breach consists in repudiating it or otherwise preventing its performance, without the fault of the other party who is willing to perform it." 9A Fla.Jur., Damages, § 83. ³

The trial court agreed with Mori's approach and awarded damages based on loss of profits arising from the repudiation by Panasonic and invoked and applied the rule long adhered to in Florida as enunciated in Sullivan v. McMillan, 26 Fla. 543, 8 So. 450 (1890), wherein the Supreme Court held:

Where the time for...