Pro-Art Dental Lab v. V-Strategic Group

• Citation: 986 So.2d 1244
• Decision Date: 10 July 2008
• Docket Number: No. SC07-1397.,SC07-1397.
• Parties: PRO-ART DENTAL LAB, INC., etc., Petitioner, v. V-STRATEGIC GROUP, LLC, etc., Respondent.
• Court: Florida Supreme Court

986 So.2d 1244

PRO-ART DENTAL LAB, INC., etc., Petitioner, v. V-STRATEGIC GROUP, LLC, etc., Respondent.

No. SC07-1397.

Supreme Court of Florida.

July 10, 2008.

David H. Charlip of Charlip Law Group, LC, Hollywood, FL, and Eric A. Jacobs of Eric A. Jacobs, P.A., Hollywood, FL, for Petitioner.

Craig Barnett and Cory W. Eichhorn of Greenberg Traurig, P.A., Fort Lauderdale, FL, for Respondent.

LEWIS, J.

This case is before the Court for review of the decision of the Fourth District Court of Appeal in Pro-Art Dental Lab, Inc. v. V-Strategic Group, LLC, 959 So.2d 753 (Fla. 4th DCA 2007), in which the Fourth District certified conflict with the decision of the Fifth District Court of Appeal in Crocker v. Diland Corp., 593 So.2d 1096 (Fla. 5th DCA 1992). The certified conflict involves the interaction of summary proceedings under chapter 51, Florida Statutes (2006), and Florida Rule of Civil Procedure 1.500(c).¹ See Pro-Art, 959 So.2d at 756-57. We have and exercise our jurisdiction to resolve this conflict. See art. V, section 3(b)(4), Fla. Const. For the reasons explained below, we quash the decision of the Fourth District in Pro-Art and approve the decision of the Fifth District in Crocker.

I. BACKGROUND

This case stems from a procedurally convoluted commercial landlord-tenant dispute between the plaintiff-respondent, V-Strategic Group, LLC (landlord), and the defendant-petitioner, Pro-Art Dental Lab, Inc. (tenant). The rental property is located at 2101 East Hallandale Beach Boulevard, Suite 302, Hallandale, Florida ("the Hallandale property"). V-Strategic's predecessor-in-interest, 1651 North Collins Corp., entered into a lease agreement with Pro-Art on or about March 20, 2000. The lease included a base six-year term, which was scheduled to cover the period from April 1, 2000, until March 31, 2006. The lease also afforded Pro-Art the right to extend the rental term for an additional five-year period. To exercise this renewal option, Pro-Art was required to provide 1651 North Collins Corp. with written notice at least 180 days (i.e., approximately six months) before March 31, 2006. On or about June 16, 2005, Pro-Art properly and timely exercised its renewal option to extend the rental term.

1651 North Collins Corp. later sold this Hallandale property to V-Strategic. This transaction included an assignment of the lease. V-Strategic purchased the Hallandale property for redevelopment purposes and appears to have been intent on attempting to vacate any existing tenants. On July 22, 2005, V-Strategic's counsel faxed Pro-Art's counsel an offer for early termination of the lease. In response, Pro-Art's counsel sent a letter dated August 25, 2005, which V-Strategic has characterized as a counter-offer, but which may more properly be characterized as "preliminary negotiation." See generally Webster Lumber Co. v. Lincoln, 94 Fla. 1097, 115 So. 498 (Fla.1927); Restatement (Second) of Contracts §§ 26-27 (1981).² The letter of August 25, which was not signed by any officer of Pro-Art, included the following items:

1) Pro-Art would remain an occupying tenant and would continue paying rent until February 2006 or until Pro-Art secured an alternative rental property, whichever occurred sooner.

2) Pro-Art would agree to an early termination of its lease (which, as extended, would not expire until 2011).

3) V-Strategic would pay Pro-Art $95,000 as consideration for the early termination to be deposited in the trust account of Pro-Art's counsel until Pro-Art vacated the premises.

4) V-Strategic and Pro-Art would each execute general releases of the other with regard to the Hallandale lease.

This letter from counsel concluded by stating that "[i]f this agreement is acceptable, please let [counsel] know and we can draft the appropriate agreement. Otherwise, my client [Pro-Art] intends to remain as a tenant until 2011 [.]" (Emphasis supplied.) In a letter dated October 13, 2005, Juan Carlos Ventura, managing member of V-Strategic, addressed Pro-Art's president directly and claimed to confirm the prior understanding of counsel that V-Strategic would accept Pro-Art's counter-offer:

We [V-Strategic] have been advised by our attorney, Mr. Santiago Eljaiek III, that you [Marina Del Toro, President and Registered Agent of Pro-Art,] have provided a counter-offer to our initial offer that would terminate your Lease as of February 28, 2006[,] in exchange for $95,000.00. As Mr. Eljaiek has already advised [counsel for Pro-Art], we are in agreement with and accept your counter-offer. Accordingly, this letter shall confirm our understanding that we shall be paying the $95,000.00 as you direct immediately upon your vacating of the Premises. Again, we thank you and appreciate your understanding and cooperation with our proposed development of our Project.

(Emphasis supplied.) V-Strategic contends that Pro-Art's alleged "counter-offer" letter and V-Strategic's alleged "acceptance" letter constituted a completed termination agreement. The record does not contain the "appropriate agreement" or releases referenced in the alleged "counter-offer," there is no indication that the parties ever drafted these documents, and V-Strategic's alleged "acceptance" of the purported counter-offer altered a term of performance (i.e., the method of payment concerning the $95,000 lease-termination consideration).³ Further, neither the underlying lease agreement nor Pro-Art's written notice of extension appears to have been produced during this litigation. Pro-Art continues to contest the existence of a valid termination agreement.⁴

As a result of these events, V-Strategic assumed the position that Pro-Art was required to terminate its occupancy as of February 2006 at the latest. However, Pro-Art continued to occupy the Hallandale property and asserted that V-Strategic had not tendered the required consideration (i.e., the $95,000) and that no properly executed termination agreement existed. On April 3, 2006, V-Strategic filed a single-count complaint in Broward County Court specifically seeking relief styled ejectment, a judgment of possession and damages,⁵ and an award of costs and attorneys' fees. V-Strategic did not attach any type of agreement signed by an appropriate representative of Pro-Art; instead, all that was attached was a letter from Pro-Art's former counsel and a letter from the managing member of V-Strategic. Cf. Fla. R. Civ. P. 1.130(a)-(b); §§ 689.01, 692.01, 692.02, Fla. Stat. (2006). V-Strategic attempted to proceed under the summary procedure provided in section 51.011, Florida Statutes (2006). On April 4, 2006, V-Strategic caused Pro-Art to be served with a five-day eviction summons, which also expressly stated that V-Strategic sought "ejectment." (Emphasis supplied.) If section 51.011 applied to ejectment actions (which it does not), Pro-Art would have had until April 11, 2006,⁶ to file an answer containing "all [of its] defenses of law or fact." See § 51.011(1), Fla. Stat. (2006). On April 7, 2006, Pro-Art filed a Motion to Dismiss for Lack of Subject-Matter Jurisdiction and Motion to Quash Service of Process, but did not file an answer or assert any affirmative defenses. In its motion to dismiss, Pro-Art correctly contended that (1) the county court lacked subject-matter jurisdiction because section 26.012(2)(f), Florida Statutes (2006), vests circuit courts, not county courts, with exclusive original jurisdiction to entertain ejectment actions and (2) the mode of procedure was improper because section 51.011's summary procedure does not apply to ejectment actions under chapter 66, Florida Statutes (2006).

On April 28, 2006, the county court conducted a hearing on Pro-Art's motion to dismiss. During the hearing, counsel for V-Strategic orally moved for default based on Pro-Art's alleged failure to comply with the five-day response period of section 51.011(1). At the conclusion of the hearing, the county court orally denied Pro-Art's motion to dismiss and indicated that the mandatory five-day response period likely required the entry of default against Pro-Art. Nevertheless, the court allowed Pro-Art three days to prepare a response to V-Strategic's ore tenus motion for default. Immediately following the April 28 hearing, Pro-Art filed an answer and a series of affirmative defenses, which included a denial of V-Strategic's claim that a valid lease-termination agreement exists in this case. The answer would have been timely under the Florida Rules of Civil Procedure, which apply during ejectment actions. See Fla. R. Civ. P. 1.140(a)(2) (establishing a 10-day response period for service of an answer after a court's ruling on a motion to dismiss).

On May 1, 2006, the county court held a hearing on V-Strategic's motion for default. Pro-Art renewed its contention that the county court lacked subject-matter jurisdiction to entertain ejectment actions. Without notice to either of the parties, the county court sua sponte amended V-Strategic's complaint by finding that "[t]he way I see this case, even though [V-Strategic] calls it ejectment, [the case] really more is in the nature of ... a tenant at sufferance[.]" (Emphasis supplied.)

Having lost the battle with regard to the county court's lack of subject-matter jurisdiction, Pro-Art next asserted that the plain text of section 51.011 provides that the "[r]ules of [civil] procedure apply to this section except when this section or the statute or rule prescribing this section provides a different procedure" and that section 51.011 does not provide a procedure with regard to the effect of an answer filed outside of the five-day response period but filed before the entry of default. § 51.011, Fla. Stat. (2006) (emphasis supplied). Therefore, according to Pro-Art, Florida Rule of Civil Procedure 1.500(c) and supporting case law supply the missing procedure during chapter 51 proceedings with regard to the effect of an untimely answer filed before the entry of default. Under that rule ...