724 F.2d 907 (11th Cir. 1984), 82-5722, Vareka Investments, N.V. v. American Inv. Properties, Inc.

Docket Nº:82-5722.
Citation:724 F.2d 907
Party Name:VAREKA INVESTMENTS, N.V., a Netherlands Antilles Corp., Plaintiff-Appellee, v. AMERICAN INVESTMENT PROPERTIES, INC., a Florida Corp., Defendant-Appellant.
Case Date:February 09, 1984
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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724 F.2d 907 (11th Cir. 1984)

VAREKA INVESTMENTS, N.V., a Netherlands Antilles Corp.,





No. 82-5722.

United States Court of Appeals, Eleventh Circuit

February 9, 1984

Rehearing Denied March 21, 1984.

Page 908

Lawrence H. Rogovin, North Miami Beach, Fla., for defendant-appellant.

Steel, Hector & Davis, Vance E. Salter, Miami, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before RONEY, HATCHETT and ANDERSON, Circuit Judges.

HATCHETT, Circuit Judge:

In this diversity case, we review the district court's award of damages to a lessor resulting from a commercial lease transaction and the termination of the lease. We affirm.


Vareka Investments, N.V. (Vareka) was incorporated under the laws of the Netherlands Antilles on October 20, 1978, to serve as a passive investment vehicle. With the exception of a shareholder who is a citizen of Italy residing in Montreal, Canada, all of the shareholders of Vareka are citizens and residents of the Republic of Ecuador. Leonard E. Treister and Jerome J. Cohen were shareholders, officers, and directors of American Investment Properties, Inc. (AIP). In January, 1978, AIP purchased The Quarters Office Park. During 1978, a company half owned by Treister and Cohen, Greater American Management Corporation (GAMC), operated The Quarters Office Park (The Quarters). In January, 1979, Vareka purchased The Quarters from AIP. Simultaneously, AIP leased The Quarters back from Vareka under a fifteen-year net lease under which AIP was obligated to pay Vareka a minimum "net" return of Vareka's cash investment. AIP was also obligated to pay all expenses and assume all duties to the subtenants and to operate The Quarters. Vareka had no liability whatsoever for the operation, maintenance, or expenses of The Quarters. Treister and Cohen, individually, guaranteed AIP's performance under the lease for the first five years, with an aggregate liability of $100,000.

On January 15, 1979, Vareka filed an "Application by Foreign Corporation for Authorization to Transact Business in Florida" with the Florida Department of State. The State of Florida granted the application, and Vareka became qualified to transact business in Florida. The qualification

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listed as the "address of principal office" of Vareka, 1400 Southeast First National Bank Building, Miami, Florida. A Resident Agent Certificate was also filed with the Secretary of State of Florida. On the certificate, Vareka designated an attorney at a Miami, Florida, law firm as its resident agent. The law firm had represented Vareka in the negotiations and consummation of the transaction, and continues to represent Vareka in Florida.

In August, 1979, AIP notified Vareka that AIP intended to terminate the lease. The present actions were commenced in September, 1979, when Vareka filed suit. In October, 1979, the district court authorized Vareka to re-enter the premises for the purposes of operation and management, pursuant to the lease agreement. Vareka hired Coldwell Banker Property Management Company (Coldwell Banker) to operate the property from October, 1979, through the date of the trial.


On September 4, 1979, soon after AIP advised Vareka of its intent to terminate, Vareka sued AIP under the lease. On September 14, 1979, Vareka sued Treister and Cohen based on the Guaranty. The trial court consolidated the cases.

Vareka moved for partial summary judgment on liability. The district court withheld ruling on Vareka's motion for summary judgment pending a determination of whether the court lacked subject matter jurisdiction. After holding an evidentiary hearing and considering memoranda of law on the issue of jurisdiction, the district court concluded that subject matter jurisdiction existed. Thereafter, the district court granted Vareka's motion for summary judgment as to the liability of AIP, Treister, and Cohen. The district court conducted a bench trial and found that Vareka suffered $548,000 in damages due to AIP's breach of the lease, and that Vareka was entitled to collect $100,000 of that amount from Treister and Cohen under the Guaranty. AIP, Treister, and Cohen (appellants) then filed a "Motion to Alter or Amend Judgment" and a "Notice of Appeal." The district court denied the motion to alter or amend judgment. The appellants did not file a new notice of appeal.


On appeal, we must decide whether the district court correctly concluded that it had subject matter jurisdiction; whether the district court correctly granted summary judgment; whether Vareka's cause of action for damages was premature; whether Vareka properly mitigated those damages; whether there was sufficient evidence to support the district court's award of damages; and whether Federal Rule of Appellate Procedure 4(a)(4) requires dismissal of this appeal.

  1. Subject Matter Jurisdiction

    Appellant, AIP, contends that the district court's finding that Vareka's principal place of business was in Quito, Ecuador, is clearly erroneous. After conducting an evidentiary hearing, the district court concluded that it...

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