Garrett v. Janiewski

• Decision Date: 25 September 1985
• Docket Number: No. 84-1186,84-1186
• Citation: Garrett v. Janiewski, 480 So.2d 1324, 10 Fla. L. Weekly 2223 (Fla. App. 1985)
• Parties: 10 Fla. L. Weekly 2223 Alan and Nancy GARRETT a/k/a Alan and Nancy Gershbein, Appellants, v. Anna C. JANIEWSKI, et al., Appellees.
• Court: Florida District Court of Appeals

Page 1324

480 So.2d 1324

10 Fla. L. Weekly 2223

Alan and Nancy GARRETT a/k/a Alan and Nancy Gershbein, Appellants, v. Anna C. JANIEWSKI, et al., Appellees.

No. 84-1186.

District Court of Appeal of Florida Fourth District.

Sept. 25, 1985.

Rehearing and Rehearing En Banc Denied Jan. 29, 1986.

Margaret Cooper and Marjorie Gadarian Graham of Jones & Foster, P.A., West Palm Beach, for appellants.

Mark A. Cullen of Cullen & Szymoniak, P.A., Lake Worth, for appellees.

DOWNEY, Judge.

Appellants, Alan and Nancy Garrett, a/k/a Gershbein, (Owners), appeal from a final judgment entered in favor of appellees, forty-six tenants in a mobile home park (tenants), in an action for declaratory and injunctive relief and damages arising out of rental agreements for mobile home lots.

In May 1981 owners purchased a mobile home park containing sixty-five mobile home lots for $800,000. At the time of the purchase the prior owners were charging $65 per month for most of the lots and $75 for the larger water view lots. In addition, there was a charge for persons other than the lessee tenants who lived on the premises. Soon after acquiring the property, owners gave the tenants written notice of an increase in rent effective June 1, 1981, to $125 and $135 per month, as well as an increase in the charge for any additional persons residing on the lot. The rent increase was paid by the tenants without any legal controversy and the owners used the increase to make substantial improvements in the park. Another stated reason for the increase was the high monthly loan obligation. The owners did not live on the premises but employed a manager who handled complaints and problems as they occurred or referred them to the owners.

Two years after the June increase, on April 1, 1983, owners increased the rent an additional $10 per month to $135 and $145. That increase precipitated this litigation in which the tenants alleged the June 1981 and April 1983 rent increases were unconscionable the owners had failed to maintain the premises, and they had charged illegal entrance and exit fees.

Only nine of the tenants testified at trial. In lieu of answering financial interrogatories, the tenants stipulated that they all could afford to pay the increases. Furthermore, the evidence reflects that for forty-three of the tenants, many of whom are Canadians, the mobile home is their seasonal or second home. There was expert testimony adduced by both sides as to the fair rental value of the lots in question as well as the rent being paid by tenants in other comparable mobile home parks. The tenants' expert testified that the rental of $65 and $75 when owners purchased was well below market value. He further opined that, when owners increased the rental to $125 and $135 in June 1981, the fair market value was $100 and $110, and when the rent was increased to $135 and $145 in April 1983, the fair market value was $110 and $115. The owners' expert and the selling broker testified that the rents being charged on both occasions, June 1981 and April 1983, were fair market value or below. In addition, some of the tenants who refused to join in the suit testified that the rents being charged were fair.

Based on the evidence adduced, the trial judge made detailed findings of fact, among which the following are the most pertinent ones in the light of the points on appeal: 1) "The mobile home units in the park are virtually unmovable, most have attached cabanas or screen rooms. Also, because of their age, most of the mobile homes cannot be relocated in another rental park, because other rental park owners will not accept units of this age into their park." 2) Since March 1981, twenty-one mobile homes have been sold in the park--four having been sold since December 1982. 3) The fair market rental value of the units in the park as of June 1981 was from $110 to $120. In April and October 1983 the fair market rental value was from $120 to $130. 4) During recent years, Martin County park owners have experienced as much as a seventy-eight percent increase in trash pickup costs in a given year and a thirty-three and one-third percent increase in taxes. 5) The owners had a net operating loss of $981 in 1983 and a net profit in 1982 of $29,000, exclusive of depreciation. 6) Owners made many improvements on the property since 1981, including well pumps, sewer lines, electrical service, and other facilities. 7) Although there were complaints by tenants concerning the length of time it took for owners to make needed repairs, there was no substantial noncompliance with ordinary services and amenities. The problems, such as they were, were considered in fixing the value of the property.

Based upon those and other findings, the trial court concluded that the rents charged by owners were unconscionable. In making this determination, the court stated that it was utilizing the two pronged test for unconscionability, requiring both procedural and substantive unconscionability. See Bennett v. Behring Corporation, 466 F.Supp. 689 (S.D.Fla.1979), appeal dismissed 629 F.2d 393 (5th Cir.1980); Kohl v. Bay Colony Club Condominium, Inc., 398 So.2d 865 (Fla. 4th DCA), rev. denied 409 So.2d 1094 (1981). The court concluded there was procedural unconscionability "because of the relative unfair bargaining position of the owners and the tenants." The court was of the opinion that the tenants could not "realistically" move their mobile homes, and stated: "Even if they could, there would be no place to which they could move their home. The other option of selling their home and purchasing a new home in a different park would also be unduly burdensome." The court opined that "[e]ither option presents substantially greater problems than simply removing oneself from an apartment." The court next concluded that there was substantive unconscionability because there was proof that the rent charged for each lot as of June 1981, April 1983, and October 1983, was fifteen dollars above the fair market rental value. The judgment held that the tenants were entitled to credit for the overpayments during the relevant periods and provided that reduction in future rents could be used to pay the overcharges. Finally, the trial court held that owners were not guilty of charging illegal entrance and exit fees but that they were guilty of illegal charges as to the persons other than tenants who stayed in the mobile homes.

In the three main points on appeal the owners contend the trial court erred in 1) determining that the rent increases were substantially unconscionable, 2) determining that the rent increases were procedurally unconsionable as to those tenants who moved into the park after the rent increases were effective and as to those tenants for whom no evidence of circumstances was presented, and 3) rolling back the rent for the one and one half years prior to filing suit. We choose not to discuss the fourth point involving a finding of fact regarding the condition of the park since there was evidence to support the court's finding.

In resolving the question of unconscionability, the trial court utilized the two pronged test described in Kohl v. Bay Colony Club Condominium, Inc. and Bennett v. Behring, and the owners have presented the first two points on appeal in the context of that test. While this test is not a rule of law, it is an effective tool in deciding the question of unconscionability, Steinhardt v. Rudolph, 422 So.2d 884 (Fla. 3d DCA 1982), and this court has held that there must be a coalescing of the two elements, procedural and substantive unconscionability, before a case for unconscionability is made out. Kohl. For a more exhaustive resume of the two aspects of the test, reference is made to Kohl, Behring and Judge Hubbart's excellent opinion in Steinhardt.

Substantive unconscionability requires proving that the terms of the contract are unreasonable and unfair, Kohl; it requires a showing of commercial unreasonableness, Johnson v. Mobil Oil Corporation, 415 F.Supp. 264 (E.D.Mich.1976); the terms must be unreasonably favorable to one party, ...