Aerojet-General Corporation v. Kirk

• Decision Date: 21 September 1970
• Docket Number: Civ. A. No. 1534.
• Citation: 318 F. Supp. 55
• Parties: AEROJET-GENERAL CORPORATION, an Ohio corporation, Plaintiff, v. Claude R. KIRK, Jr., Governor, et al., Defendants.
• Court: U.S. District Court — Northern District of Florida

318 F. Supp. 55

AEROJET-GENERAL CORPORATION, an Ohio corporation, Plaintiff, v. Claude R. KIRK, Jr., Governor, et al., Defendants.

Civ. A. No. 1534.

United States District Court, N. D. Florida, Tallahassee Division.

September 21, 1970.

COPYRIGHT MATERIAL OMITTED

Karl B. Block, Jr., Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, Fla., for plaintiff.

Phillip S. Bennett, Gen. Counsel, Board of Trustees of the Internal Improvement Trust Fund.

Rivers Buford, Jr., Gen. Counsel, State of Florida Board of Education, Tallahassee, Fla., for defendants.

SUMMARY FINAL JUDGMENT FOR PLAINTIFF AND ORDER ON MOTIONS

MIDDLEBROOKS, District Judge.

The above cause initially came on for hearing before the Court on February 18, 1970, upon plaintiff's Motion for Summary Judgment, plaintiff's Motion to Strike certain defenses contained in the Answer of the defendants, and defendants' Motion to Dismiss the Complaint, the latter motion having been filed by the defendants along with their Answer to the Complaint. Prior thereto memorandum briefs had been submitted by plaintiff and defendants in support of their respective motions. At the conclusion of said hearing, the Court requested counsel for plaintiff and defendants to submit additional memoranda of law, and reply memoranda of law upon certain questions the Court raised. Such additional memoranda and reply memoranda were filed and thoroughly considered by the Court. Further oral argument was held before the Court on August 28, 1970, upon the aforesaid motions. The Court having now considered all of said pending motions as well as the pleadings, affidavits, admissions and exhibits on file with the Court and the concessions made by counsel for defendants in oral argument before the Court, is of the opinion and finds that there is no genuine issue of material fact to be tried in this cause and that the plaintiff is entitled to the entry of summary final judgment in its favor as a matter of law and grants the relief sought and prayed for by the plaintiff in its Complaint. The Court makes the following specific findings of undisputed material fact and conclusions of law:

FINDINGS OF UNDISPUTED MATERIAL FACT

The plaintiff is and was at the time of filing of its Complaint herein a corporation duly incorporated, organized and existing under the laws of the State of Ohio, with its principal offices and place of business in a state other than Florida. The defendants¹ are the present constituent members of the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida (successors in office to the Trustees of the Internal Improvement Fund of the State of Florida), and the State Board of Education of Florida, both component state agencies of the State of Florida. They are and were at the time of the filing of plaintiff's complaint herein, citizens of the State of Florida and residents of Leon County, Florida. The matter in controversy herein exceeds the sum of $10,000.00, exclusive of interest and costs.

On December 21, 1961, plaintiff and the Trustees and Board of Education of Florida executed and entered into a Lease With Option To Purchase (Exhibit A to the complaint — hereinafter referred to as "Lease-Option" or "contract"). The Lease-Option recited satisfaction of all statutory requirements, performance of all prerequisites to execution of the Lease-Option, and the authority of the Trustees and Board of Education to enter into and execute the Lease-Option. The Trustees and Board of Education by that instrument leased to plaintiff approximately 25,313 acres of specifically described real estate located in Dade County, Florida, for ten years. The defendants owned fee title to the land in their respective official capacities.

Among the covenants of the plaintiff under the Lease-Option was its agreement: (i) to pay an annual rental in advance commencing on the date of execution of the Lease-Option and continuing on the anniversary date thereof each year thereafter in the sum of $2.50 per acre, (ii) to pay annually to the appropriate local governmental agencies a sum of money equal to, but in lieu of, the amount of ad valorem real estate taxes which would be due and payable on the leased lands if title thereto were owned in fee by the plaintiff, together with any valid special assessments levied upon the property (hereinafter referred to as "in lieu taxes") which in lieu taxes would be paid during the lease period or until purchase of the property by plaintiff was effectuated under the option to purchase granted it therein, and (iii) to commence within twelve months after the date of execution of the Lease-Option construction and installation of a manufacturing plant and associated facilities upon the leased lands or upon lands contiguous thereto owned, leased or controlled by plaintiff and in so doing to utilize the leased lands in conjunction with the operation of such manufacturing plant and associated facilities.

Under paragraph 8 of the Lease-Option, the Trustees and Board of Education granted to the plaintiff the exclusive right, option and privilege to purchase all of the lands described therein "at any time within the ten (10) year lease period" for a price of $50.00 per acre, the purchase price to be determined by the number of acres multiplied by $50.00, less the amount of any unearned rent paid by the plaintiff under the lease. No specific mode or manner of exercise of said option to purchase was specified in the Lease-Option. The option to purchase allowed plaintiff an election to pay the total amount of the purchase price simultaneously with delivery to it of a deed to the property vesting good and merchantable fee simple title thereto in the plaintiff, or to pay any amount up to or in excess of 20% of the total purchase price simultaneously with the execution of a "contract to purchase" between the parties. Under said contract to purchase, a promissory note would be given by plaintiff to defendants in the amount of the unpaid balance, due and payable in ten equal, consecutive, annual installments with interest on the unpaid balance at the rate of 5% per annum. Plaintiff was granted the right to pre-pay the unpaid balance without penalty at any time, in which event the Trustees and the Board of Education would deliver to plaintiff a deed to the subject lands vesting good and merchantable fee simple title thereto in the plaintiff. Neither the Lease-Option nor the Notice of Bids and Public Sale, pursuant to which the Lease-Option was executed, contained any condition precedent to the plaintiff's exercise of the option to purchase, save its exercise during the ten-year lease period and the payment by plaintiff of the purchase price. Specifically, the Lease-Option did not contain any term, covenant or condition that plaintiff not have breached, or not be in default in the performance of any lease covenant, or that the lease be in good standing as a condition to its exercise of the option to purchase.

The Lease-Option specifically provided that, upon plaintiff's exercise of the purchase option, all covenants of the lease agreement would cease, except that contained in paragraph 5, prohibiting plaintiff, except with defendants' permission, from using the property for "purposes of land speculation in any manner whatsoever" for a period of ten years next following execution of the Lease-Option.

The Lease-Option specifically granted the Trustees and Board of Education the "right to cancel" the lease upon breach of or failure of plaintiff to comply with any of the lease covenants; but only after the Trustees and the Board of Education gave plaintiff sixty days prior written notice of their intention to cancel the lease for such breach of covenant, during which period plaintiff had the right to cure such alleged breach or failure to comply with any of the lease covenants.

Prior to execution of the Lease-Option, to-wit: On September 21 and 28 and October 5, 12 and 19, 1961, a Notice of Bids and Public Sale (Exhibit 1 to plaintiff's Request for Admissions of Fact—hereinafter referred to as the "Notice") was duly published in the Homestead News, a newspaper of general circulation in Dade County, Florida, in its editions of those dates, in compliance with and as provided for in Sections 270.07-270.09, Florida Statutes, 1961, F.S.A., and a Proof of Publication thereof (Exhibit I to plaintiff's Request for Admissions of Fact) was duly executed by said newspaper and filed with the Trustees and Board of Education.

On the day and in the manner specified by said Notice, plaintiff submitted the high bid on the Lease-Option offering. The parties thereafter executed and entered into a written Lease-Option agreement, the terms of which were essentially identical to the terms enumerated in said public Notice. There were minor and insignificant differences in the Notice terms and in the Lease-Option terms. The Lease-Option reserved to defendants the right to cancel the Lease-Option upon sixty days' prior written notice for the alleged breach of "any" lease covenant. The Notice prescribed cancellation rights only in the event of breach of the covenant contained in paragraph 3 of the Lease-Option. This modification of terms inured to defendants' benefit. Also, the Lease-Option contained a specific procedure to be utilized by defendants in the event they sought to terminate the contract for an alleged breach by plaintiff. A sixty-day notice of default, with opportunity to cure, was the contractual formula implemented to effect the condition in the Notice that under certain circumstances defendants could in their "discretion" terminate the Lease-Option.

Notwithstanding these minor variations, the Court finds that the terms of the Notice and of the Lease-Option were identical in substance, and that the contract here sought to be specifically enforced fairly and properly reflects and contains the terms and provisions enumerated in the Notice.

On January 14, 1963, pl...