Glover Distributing Co., Inc. v. FTDK, INC.

• Decision Date: 24 May 2002
• Docket Number: No. 5D01-2213., No. 5D01-1316
• Parties: GLOVER DISTRIBUTING CO., INC., and the Radiant Group, LLC, Appellant/Cross-Appellee, v. F.T.D.K., INC., Appellee/Cross-Appellant.
• Court: Florida District Court of Appeals

816 So.2d 1207

GLOVER DISTRIBUTING CO., INC., and the Radiant Group, LLC, Appellant/Cross-Appellee, v. F.T.D.K., INC., Appellee/Cross-Appellant.

Nos. 5D01-1316, 5D01-2213.

District Court of Appeal of Florida, Fifth District.

May 24, 2002.

Allan P. Whitehead of Frese, Nash & Hansen, P.A., Melbourne, for Appellant/Cross-Appellee.

David N. Glassman of David N. Glassman, P.A., Orlando, for Appellee/Cross-Appellant.

PALMER, J.

In this consolidated appeal, Glover Distributing Company and the Radiant Group, LLC (collectively "Glover") appeal the final judgment entered by the trial court in accordance with the jury's verdict in favor of F.T.D.K. on its breach of contract claim (Case No. 01-1316), and the trial court's supplemental final judgment awarding F.T.D.K. prejudgment interest (Case No. 01-2213). Finding no reversible error, we affirm.

Glover leased the Merritt Island Amoco Station to F.T.D.K. pursuant to a lease which ran for a period of three years, from July 1996 through June 1999. Paragraph twenty of the parties' lease agreement was entitled "Redevelopment Rider" and provided Glover the right to modify the existing building and improvements during the term of the lease. The rider further gave F.T.D.K. a waiver in rent during the period of construction in the event such redevelopment occurred and, in exchange, prohibited F.T.D.K. from recovering business loss damages incurred during such construction.¹

The lease also included a separate "Improvement Addendum", which outlined details of a specific agreement by Glover to improve the property during F.T.D.K.'s three year leasehold. The agreement provided that, until such construction was commenced, F.T.D.K. was only required to pay Glover half of its usual rent amount and during construction no rent would be due. The Improvement Addendum also offered F.T.D.K. the option of renewing the lease for an additional three year period. It also contained the following antiwaiver provision:

[N]o action or lack of action unless specifically noted herein on the part of Lessee shall likewise be construed as an implied waiver or abridgment.

During F.T.D.K.'s initial three year leasehold, Glover failed to make any improvements to the property notwithstanding the terms of the Improvement Addendum and F.T.D.K.'s request and demands related thereto. During that same three year time period, F.T.D.K. paid Glover the reduced rental rate. Near the end of the leasehold period, F.T.D.K. exercised its option and renewed the lease for an additional three years. F.T.D.K. subsequently initiated this lawsuit alleging that Glover had breached the initial lease agreement by failing to timely complete the improvements outlined in the Improvement Addendum. After the complaint was filed, Glover commenced construction of the improvements. F.T.D.K.'s rent was completely abated from September 1999 to January 2000, at which time Glover determined that the construction was completed. Starting February 2000, Glover demanded payment of the full rent amount; however, F.T.D.K. protested, claiming that all of the improvements had not been completed. Upon further demand, F.T.D.K. remitted full payment of its rent starting February 2000 but did so under protest. F.T.D.K. then amended its complaint to include a claim for the amount it contended had been overpaid for rent starting in February of 2000.

Glover filed an answer denying liability and asserting several affirmative defenses, including waiver and estoppel based upon F.T.D.K.'s acceptance of the benefit of paying a reduced rental rate during the initial three year leasehold while failing to demand timely performance of the work required under the Improvement Addendum. Glover also asserted that F.T.D.K. had failed to mitigate its damages by not completing the improvements itself.

Upon trial, the jury returned a special verdict finding that Glover breached the lease agreement, but that F.T.D.K. failed to mitigate its damages. The jury awarded F.T.D.K. damages for lost profits and rent overpayment. The trial court entered judgment in accordance with the jury's verdict and Glover timely filed a notice of appeal. While the appeal was pending, F.T.D.K. filed a motion requesting this court to relinquish jurisdiction over the case to the trial court for the purpose of entering an award of prejudgment interest. This court granted that motion and, upon remand, the trial court entered a supplemental final judgment awarding F.T.D.K. prejudgment interest. Glover filed a separate, timely notice of appeal from that order. The two appeals were thereafter consolidated by order of this court. Glover asserts four points on appeal, none of which possesses merit.

First, Glover contends that the trial court erred in refusing to permit it to assert the defense that, under the terms of the parties' contract, F.T.D.K. was not entitled to recover business loss damages. Glover bases its argument upon the contention that the following language set forth in the Improvement Addendum "essentially" constituted a liquidated damage clause, thereby prohibiting the recovery of additional business loss damages:

Upon execution of the lease agreement until commencement of a construction of improvements, rent shall be reduced from $6,090.00 to $3,045.00 each month. During the period of construction of improvements, no rent shall be due and payable....

We reject this argument as meritless.

Parties to a contract can stipulate in advance to an amount to be paid or retained as liquidated damages in the event a breach of the contract occurs. See Poinsettia Dairy Products v. Wessel Co., 123 Fla. 120, 166 So. 306 (1936). Where the parties to a contract have agreed to the consequences of a breach, the agreement will control provided the remedy is mutual, unequivocal, and reasonable. Hatcher v. Panama City Nursing Center, Inc., 461 So.2d 288 (Fla. 1st DCA 1985). Here, the trial court properly concluded that the provision set forth above was not an enforceable liquidated damage provision because it does not contain unequivocal language indicating what damages would be paid if a breach of the contract occurred. Instead, the provision simply set forth the consideration given by Glover to F.T.D.K. in exchange for F.T.D.K.'s agreement to execute the lease pending construction of the agreed upon improvements. Since the provision was applicable from the initiation of the lease, and not dependant upon a subsequent breach of the contract, it could not constitute a liquidated damage provision.

Glover also argues that the trial court erred in denying its request to present argument to the jury concerning the applicability of the terms of the Redevelopment Rider. Our review of the record reveals that the trial court properly concluded that the terms of the Redevelopment Rider were irrelevant to the instant controversy because the construction at issue specifically fell within the terms of the Improvement Addendum, not the terms of the Redevelopment Rider.

Glover also argues that the trial court erred in denying its requested jury instruction on the defense of waiver. Glover requested the instruction, contending that by renewing its lease, F.T.D.K. waived its right to object to Glover's failure to complete the improvements during the initial leasehold and thus Glover was entitled to receive a jury instruction on waiver. We find no error. First, since the Improvement Addendum specifically contains an anti-waiver provision, the trial court properly denied Glovert's...