City of Miami Beach v. Carner, s. 89-2726

Citation579 So.2d 248,16 Fla. L. Weekly 1149
Decision Date30 April 1991
Docket Number89-3004,90-50 and 90-126,89-3003,90-49,Nos. 89-2726,s. 89-2726
PartiesCITY OF MIAMI BEACH, Florida, a Florida municipal corporation, and Miami Beach Redevelopment Agency, a public agency existing under the laws of Florida, Appellants, v. Stephen CARNER, Irwin H. Mason, and Lis, Inc., a Florida corporation, as general partners in Carner-Mason Associates, Ltd., a Florida limited partnership, d/b/a Miami Beach Marina, Appellees. 579 So.2d 248, 16 Fla. L. Week. 1149
CourtCourt of Appeal of Florida (US)

Daniels & Talisman and Sam Daniels, Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin and Joel S. Perwin, Miami, Laurence Feingold, Miami Beach, for appellants.

Steel, Hector & Davis and Gerry S. Gibson and Thomas M. Karr, Miami, for appellees.

Before NESBITT, BASKIN and JORGENSON, JJ.

NESBITT, Judge.

This is a consolidated appeal of orders entered on partial summary judgment and final judgment following a jury trial in a breach of contract case. Based on the following analysis, we reverse and remand for a new trial.

Facts

While the specific facts relevant to each issue will be set forth within this opinion as necessary, the foundation facts are that in 1983 Carner-Mason Associates, appellee/plaintiff below, entered into a thirty-year lease under which the firm was to build and operate a marina on the City of Miami Beach's property. Various problems arose and in 1985, Carner-Mason stopped paying rent and filed a breach of contract suit against the City of Miami Beach and the Miami Beach Redevelopment Agency, appellants/defendants below. Carner-Mason remained on the property, however, and the city filed an eviction suit in 1986. 1 The firm ultimately remained on the property until 1989 when its mortgage was foreclosed.

The contract action alleged that the defendants had breached numerous provisions of the lease agreement. During the course of litigation, the trial court entered various rulings which were erroneous and which require a new trial. We shall address only those primary issues which control our decision and those secondary issues which may arise and impact the second trial.

Joint Liability of Redevelopment Agency and City

The first issue is whether the trial court correctly ruled that the redevelopment agency was a party to the lease and liable for any breach to the same extent as the city. We hold that the agency is jointly liable. While the directed verdict upon which this holding was based cannot stand, we treat the motion for directed verdict as if it were a motion for summary judgment on the issue and thus affirm that ruling. Cf. Harvey Bldg., Inc. v. Haley, 175 So.2d 780 (Fla.1965) (Summary judgment may be categorized as a "pre-trial motion for a directed verdict." (citing to Locke v. Stuart, 113 So.2d 402 (Fla. 1st DCA 1959)).

The agency consists of the city commission and key members of the city administration, including the city manager, who is the executive director of the agency, and the assistant city manager, who is the agency's deputy director. After the lease was executed, the city and the agency entered into an agreement whereby the agency was to be completely responsible for administering and performing the contract and was to receive all income from the project. While the agency argues that it cannot be jointly liable with the city because its name is not listed as a party to the lease and because any warranties made were made exclusively by the city, the record shows that addenda to the lease which were incorporated into the final agreement define the city as both the city and its agency. The agency jointly invited bids; the lease's preamble stated that by resolution, the agency authorized and directed the city manager to negotiate with Carner-Mason and that the agency determined it was in South Beach's best interest to redevelop the marina on land subject to the control of the agency and pursuant to permits issued to the agency by the Department of Environmental Resources and the U.S. Corps of Engineers.

These facts indisputably show that the agency is jointly liable with the city for any breaches of the marina project lease agreement.

Partial versus Total Breach of the Contract

The trial court entered summary judgments as to liability for breach of the lease agreement against the city on five issues. Three issues of liability were left for trial. As to whether appellants would be liable for damages for total or partial breach, the lower court repeatedly ruled that Carner-Mason could recover for total breach of contract and that no issues as to partial breach would be submitted to the jury. This was patently erroneous. The rule is quite clear that a contracting party, faced with a material breach by the other party, may treat the contract as totally breached and stop performance. However, if the complaining party continues to demand performance from the breaching party, damages can only be recovered for partial breach. Restatement (Second) of Contracts Secs. 84, 243, 246, 247 (1981); see Johnson v. Dichiara, 84 So.2d 537 (Fla.1955).

In this case, Carner-Mason claimed a total breach had occurred in August 1985 when the firm's principals decided the project was doomed and stopped construction. Nevertheless, by its actions, Carner-Mason did not treat any alleged breach as a total breach since it continued to stay on the property for four more years, until October 1989 when its mortgage was foreclosed.

Nevertheless, we do not hold as a matter of law that Carner-Mason is entitled to recover only for any partial breach which may be proven because it remains to be determined whether a non-waiver clause in the lease entitled Carner-Mason to remain on the property after declaring a breach and still recover total breach damages. The non-waiver clause states that failure of a party to enforce a lease provision would not waive a breach which may occur.

Defendants argue that the parties waived the non-waiver provision: Carner-Mason when it filed suit, and the defendants when they made written demand of eviction. They further argue that the provision is sufficiently ambiguous that it does not preclude the argument that Carner-Mason may be limited to damages for partial breach since it elected its remedy by choosing to remain on the property for four years after declaring a breach had occurred. See Protean Investors, Inc. v. Travel, Etc., Inc., 499 So.2d 49 (Fla. 3d DCA 1986); Doral Country Club, Inc. v. Curcie Bros., Inc., 174 So.2d 749, 751 (Fla. 3d DCA), cert. denied, 180 So.2d 656 (Fla.1965). Thus, upon remand, both the significance of Carner-Mason's remaining on the property after declaring a breach and the significance of the lease agreement's non-waiver provision on the type of damages to which Carner-Mason should be entitled upon proof of a material breach must be determined.

Partial Summary Judgments

As to the summary judgments, we hold that all five bases upon which summary judgment on liability was entered for the plaintiff were erroneous because genuine issues of material fact remain to be decided. Each issue involved in the summary judgment will be addressed separately.

Failure of the City to Provide Survey Information

The trial court found that the city breached the contract by failing to provide Carner-Mason with adequate survey information on the marina site. The trial judge found that the city had a contractual obligation to have provided this information. However, there is no specific term in the contract requiring the city to pay for such a survey. Moreover, the record shows that the city did provide Carner-Mason with a survey. However, if, upon retrial, it is determined appellants were required to provide a survey, questions remain whether it was adequate and timely delivered. Obviously, summary judgment was prematurely entered on this issue.

Failure to Provide Carner-Mason with a Fifty-Foot Wide
Baywalk Easement

The trial court ruled that the city breached the lease agreement by cutting the width of the baywalk, which was to be a part of the project, in half from fifty feet to twenty-five feet and by conveying the other half to the original developer of the project, South Shore Developers, Inc. (SSDI), as part of a legal settlement with that group. We find that issues of material fact remain regarding this issue. The record shows that Carner-Mason entered into the lease with knowledge that SSDI had claims pending as to its right to develop the marina project.

Within the areas termed by the parties as Areas Three and Four of the project where the disputed baywalk lies, Carner-Mason knew that, according to the terms of the lease agreement, its rights were terminable at will by the city. It remains to be decided whether the lease guaranteed a baywalk of the size claimed by Carner-Mason. Thus it was error to enter summary judgment on this issue.

Failure of the City to Obtain Shoreline Restoration Permit

The record shows that a shoreline restoration permit was necessary to build the marina's contemplated dry-stack boat storage facility and baywalk. The parties stipulated that such a permit was necessary to build within Area Two of the marina site. We find that the trial court erred in holding, as a matter of law, that the city breached the agreement by failing to have a shoreline restoration permit in place when the agreement was signed. It is true the lease warranted that as of the day the contract was signed, the city had the necessary shoreline restoration permit; it is also true that the city stipulated that it did not have such a permit until two years after the lease was signed. However, this evidence alone does not prove a breach of the agreement in light of the fact that there was evidence that Carner-Mason knew and accepted the fact that the city lacked the permit when the lease was signed.

After Carner-Mason signed the lease, and before the city signed, Carner-Mason's attorney sent the city...

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