Belcher v. Kier

• Decision Date: 02 February 1990
• Docket Number: No. 88-02373,88-02373
• Citation: 558 So.2d 1039
• Parties: 15 Fla. L. Weekly D321 Douglas BELCHER, d/b/a Club Wildwood Mobile Home Village, Appellant, v. George KIER, et al., Appellees.
• Court: Florida District Court of Appeals

Page 1039

558 So.2d 1039

15 Fla. L. Weekly D321

Douglas BELCHER, d/b/a Club Wildwood Mobile Home Village, Appellant, v. George KIER, et al., Appellees.

No. 88-02373.

District Court of Appeal of Florida,

Second District.

Feb. 2, 1990.

Rehearing Denied April 6, 1990.

Alan C. Sundberg, Sylvia H. Walbolt, and Paul E. Lund of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa, for appellant.

John T. Allen, Jr., and Christopher P. Jayson of John T. Allen, Jr., P.A., St. Petersburg, for appellees.

Jack M. Skelding, Jr., and David D. Eastman of Parker, Skelding, Labasky and Corry, Tallahassee, for amicus curiae Florida Manufactured Housing Ass'n, Inc.

Lee Jay Colling and Thomas Presnell, Jr., of Lee Jay Colling & Associates, P.A., Orlando, for amicus curiae Federation of Mobile Home Owners of Florida, Inc.

PER CURIAM.

The appellees, mobile home park tenants, brought a suit for declaratory judgment against the appellant, the park owner, alleging that rental increases for the years 1982 through 1988 were unconscionable and requesting relief pursuant to the Florida Mobile Home Act, chapter 723, Florida Statutes (1986). The trial court found that the increases were unconscionable and ordered the rental increases reduced. We reverse.

Because the determination of unconscionability is a matter of law, Garrett v. Janiewski, 480 So.2d 1324 (Fla. 4th DCA 1985), we view the evidence from the same vantage point as the trial court. In determining the "chameleon-like" nature of unconscionability, Steinhardt v. Rudolph, 422 So.2d 884, 890 (Fla. 3d DCA 1982), several courts have discussed the applicable law, including this court, B.J. Pearce v. Doral Mobile Home Villas, Inc., 521 So.2d 282 (Fla. 2d DCA 1988); see also, Colonial Acres v. Wallach, 558 So.2d 25 (Fla. 3d DCA 1989) (Ferguson, J., dissenting); Ashling Enterprises, Inc. v. Browning, 487 So.2d 56 (Fla. 3d DCA 1986); Garrett, 480 So.2d at 1326; Aristek Communities, Inc. v. Fuller, 453 So.2d 547 (Fla. 4th DCA 1984). These cases make clear that the court must view unconscionability in a two-pronged approach, i.e., procedural unconscionability and substantive unconscionability. The trial court found for the appellees on both aspects of unconscionability. We reverse because, while we agree with the trial court's determination of procedural unconscionability, we disagree with its conclusion that the rental increases were grossly excessive, and thereby substantively unconscionable. Thus, because the appellees were unable to carry their burden as to both prongs, the ruling in their favor cannot stand.

These are the facts as found by the trial court, and not disputed here. In 1978 the appellant purchased the park, ¹ located in Hudson, for 1.1 million dollars. At that time, there were 70 developed lots of which approximately 30 were occupied. Also, the clubhouse, swimming pool, and other park amenities were substantially complete. After the appellant purchased the park, he expended additional sums to expand and complete the park. He instituted a sales program in 1978 which succeeded in achieving full occupancy of the park. Based on what the park's sales representatives told them and the promises in the advertising literature, tenants in the park expected that future lot rental increases would be based on the percentage increase in the Cost of Living Index. The park management later amended this to reflect that the owner would use either the increase in the Index or in actual operating costs, such as taxes and utilities. ²

After reaching full occupancy, (approximately 478 lots), in 1984 the appellant placed a 4.2 million dollar, interest only, shared appreciation, balloon mortgage on the park. The funds received from this loan were withdrawn by the appellant and were not utilized for repairs, renovation, development, or improvement of the park. Significantly, the court made no factual finding that the services or amenities of the park have been reduced; but we also note that there were no major capital improvements, renovations, or additions to the park since its completion. The rents under review here were charged by the appellant for lots in a mobile home park which all parties acknowledge is a, if not the, premier mobile home park in Pasco County. The rental charges, the highest in Pasco County, varied within the park depending upon the situation of each lot, i.e., whether it was an inside, corner, small waterfront, or large waterfront lot.

Starting in 1982 the rent for the basic inside lot (the category containing the vast majority of lots) increased annually, from $114 per month to $197 per month in 1988. ³ These rents were substantially in excess of increases in the Consumer Price Index. ⁴ Each year the appellant unilaterally implemented these rental increases without giving the appellees an opportunity to bargain with him about the size of the increase. The order recites that this was the case for all residents regardless of age, education, intelligence, financial position, or business acumen. The appellees had no choice but to pay the rental increases or bear the burden of attempting to relocate their mobile home or sell the home with the possibility of a large loss. This was the situation which gave rise to the appellees' claims of procedural and substantive unconscionability.

In March of 1986, the appellees, 241 of the park's tenants/mobile home owners, filed a complaint alleging the rents charged were unconscionable under section 723.033 Florida Statutes (1985). By the time of the trial two years later, 330 of all tenants were parties to the lawsuit. Some of these parties had moved into the park after the original suit was filed. At the bench trial in 1988 both sides presented extensive evidence, including expert testimony regarding fair market values and the rents charged in other parks in Pasco and northern Pinellas Counties.

The trial court concluded that the park competed for tenants within a market primarily limited to western Pasco County, where only one other park was truly comparable to the appellant's. The court found that the appellant's park was a highly desirable residential park "which could have justifiably charged rental fees which ranged from 30% to 50% above the average of fees charged by Pasco County parks." The court further found the fair market rental value of the basic inside lot for the years in question to be the following:

1982--$114

1983--$125

1984--$137

1985--$147

1986--$159

1987--$165

1988--$170

The court found that there was procedural unconscionability because of the absence of any meaningful choice on the part of the appellees, citing Kohl v. Bay Colony Club Condominium, Inc., 398 So.2d 865 (Fla. 4th DCA), petition for review denied, 408 So.2d 1094 (Fla.1981). We affirm this initial finding because of the evidence amply supporting it and because the trial court properly applied the correct law to the facts as found. Of course, had the trial court not found procedural unconscionability, there would have been no need to inquire further. If the appellees, indeed, truly had had an opportunity to bargain on an equal footing with the park owner about the size of the yearly increase, they would not now be heard to complain of the bargain they freely entered into.

Mobile home park tenancy presents a situation where mobile home owners, who generally own their residence which is usually of considerable size and misnamed "mobile," must lease the land upon which to place this structure. Because of the difficulties inherent in moving the home from one settled location to another, Pearce, 521 So.2d at 284, it is hard to imagine a situation where the park owner and the tenants are in an equal bargaining position on rent increases. The legislature, cognizant of widespread abuses against mobile home park tenants, sought to redress this resulting imbalance by giving the park tenants an avenue to the courts to remedy what the tenants perceived as unconscionable rental charges. Department of Business Regulation v. National Manufactured Hous. Fed'n, Inc., 370 So.2d 1132 (Fla.1979); Palm Beach Mobile Homes, Inc. v. Strong, 300 So.2d 881 (Fla.1974). In adopting the Florida Mobile Home Act, the legislature stopped short of implementing strict rent-control in this setting. Nevertheless, park tenants can usually make, as did the appellees here, the necessary showing of procedural unconscionability for the court to consider next the merits of their substantive unconscionability claim.

After finding the necessary first prong of procedural unconscionability, the trial court then found that there was also substantive unconscionability, a finding which we set out in full below:

c. The facts set out above establish substantive unconscionability because of the outrageous degree of unfairness. Kohl, supra, Steinhardt, supra. It is clear to the Court that the park owner has overreached the park residents and has gained an unjust and undeserved advantage which it would be inequitable to enforce, Peacock Hotel, Inc. v. Shipman, 138 So. 44, 46 (Fla.1931), because:

(1) The lot rental increases are not based on a legitimate financial basis for calculating rental values, but are arbitrary and capricious in that they were driven by the consequences of the [appellant's] refinancing. Moreover, the increases are confiscatory in nature because they have reduced the value of the mobile home owner's property. B.J. Pearce v. Doral Mobile Home Villas, Inc., 521 So.2d 282 (Fla. 2d DCA 1988); Appel v. Scott, 479 So.2d 800 (Fla. 2d DCA 1985); Offner v. Keller Park Investors, I, Ltd., 19 Fla.Supp.2d 140 (Fla. 6th Cir.Ct.1986); Fredricks v. Hofmann, 45 Fla.Supp. 44 (Fla. 12th Cir.Ct.1970) aff'd 354 So.2d 992 (Fla. 2d DCA 1978); Section 723.031(5), Florida Statutes (1987).

(2) The increased lot rental amount is significantly higher than the fair market rental value of the lots in Club Wildwood Mobile Home Village. Aristek Communities, Inc. v. Fuller, 543 So.2d...