Ludal Development Co. v. Farm Stores, Inc., 83-1727

• Decision Date: 09 October 1984
• Docket Number: No. 83-1727,83-1727
• Citation: 458 So.2d 781
• Parties: LUDAL DEVELOPMENT COMPANY, Appellant, v. FARM STORES, INC., Appellee.
• Court: Florida District Court of Appeals

Page 781

458 So.2d 781

LUDAL DEVELOPMENT COMPANY, Appellant, v. FARM STORES, INC., Appellee.

No. 83-1727.

District Court of Appeal of Florida Third District.

Oct. 9, 1984.

Rehearing Denied Dec. 3, 1984.

Arky, Freed, Stearns, Watson & Greer and Eugene Stearns and Bradford Swing, Miami, for appellant.

Hornsby & Whisenand and Ronald P. Weil, Miami, for appellee.

Before SCHWARTZ, C.J., and HENDRY and FERGUSON, JJ.

HENDRY, Judge.

Appellant Ludal Development Company appeals from a ruling of the circuit court finding that a five year lease renewal option given to appellee Farm Stores, Inc. was valid and enforceable and setting a reasonable rent for the period at $2,000.00 per month. We affirm.

Appellee Farm Stores entered into a lease on the subject property in 1965. One of the lease provisions granted appellee the option of extending the lease for two successive five year terms at the expiration of the original twelve year lease. Appellee exercised the first five year option in 1977. The property was sold, subject to the lease in June, 1981. There was a dispute between appellee and the new owner, Mr. Arias, over the rental payment that month, the new owner declaring the lease to be in default and appellee thereafter paying the monthly rent into its attorney's trust account. ¹ Arias filed suit for eviction, which was dismissed. He then filed a declaratory relief action seeking a determination that 1. appellee was in default because of the rent dispute and 2. the second lease extension option was unenforceable because the lease itself did not set a price term for the new period but provided instead for negotiation and agreement between the parties at the time of the extension, or, in the event that the parties could not agree on a new rental price, that appellee would be given the right of first refusal of any bona fide offer received by the landlord.

On June 21, 1982, Mr. Arias sold the property to appellant's assignor, Mr. Alvarez. On May 7, 1982, prior to the actual closing on the property, Mr. Alvarez sent a letter to appellee offering to negotiate a lease extension. The letter stated, however, that Mr. Alvarez expected to receive $73,656.00 per year as rent and that this amount was firm and non-negotiable. Appellee had been paying approximately $4,700.00 per year in rent as well as paying the property tax bill. On May 9, appellee sent a telegram and followed with a letter on May 10 to Mr. Arias notifying him that it was electing to exercise the lease extension option. The record reflects that appellee offered to pay $14,400.00 per year as rent during the second lease extension. Thereafter, the parties could not agree on a rent for the extension period, appellant refused to offer the property for rent so that appellee could exercise its right of first refusal as provided for in the lease, and in August, 1982, appellant joined Mr. Arias as a plaintiff in the pending declaratory relief action.

Plaintiffs moved for summary judgment. After a hearing, the trial court decided that appellee was not in default on the June, 1981 rent payment, the extension option provision in the lease was valid and enforceable, and that the only remaining issue for trial was the amount of a reasonable rent. After a trial on that issue, the court decided that $2,000.00 per month was a reasonable rent for the five year extension period. In addition the court set the amounts owed as back rent by appellee to Mr. Arias and appellant. This appeal ensued. ²

The trial court correctly found that the lease extension provision was valid and enforceable because, while there was no price term specified in the extension provision itself, there was a method provided by which a rental price could be...