Schroeder v. Johnson, 96-2843

• Citation: 696 So.2d 498
• Decision Date: 03 July 1997
• Docket Number: No. 96-2843,96-2843
• Parties: 22 Fla. L. Weekly D1652 Lynda Russell SCHROEDER and Mark Stenstrom, etc., Appellants, v. Joyce F. JOHNSON, Appellee.
• Court: Florida District Court of Appeals

Page 498

696 So.2d 498

22 Fla. L. Weekly D1652

Lynda Russell SCHROEDER and Mark Stenstrom, etc., Appellants, v. Joyce F. JOHNSON, Appellee.

No. 96-2843.

District Court of Appeal of Florida Fifth District.

July 3, 1997.

Thomas A. Speer of Thomas A. Speer, P.A., and George B. Wallace of George B. Wallace, P.A., Sanford, for Appellants.

R. Edward Cooley of Shepherd, McCabe & Cooley, Longwood, for Appellee.

COBB, Judge.

The appellee, Joyce Johnson, filed her complaint below seeking a declaratory judgment that a lease between herself and the Eleanor C. Russell Inter Vivos Trust provided for perpetual renewals. The lease was prepared by Johnson's attorney and executed by a prior trustee who, at the time, was in federal prison and dying of cancer. That trustee died several months after execution of the lease, and his testimony as to intent was not available at trial. The specific lease provision relied upon by Johnson is paragraph 6 which states:

Landlord does hereby grant to Tenant the right to extend this lease for successive five (5) year periods. Such right shall be executed by Tenant giving written notice of intent to exercise right of extension which written notice shall be delivered to Landlord by certified mail return receipt requested not less than ninety (90) days prior to the termination of the then existing rental.

The present trustees argue against any interpretation that the lease is "perpetual," and rely, inter alia, on the case of Hutson v Knabb, 212 So.2d 362 (Fla. 1st DCA 1968). In Hutson, the operative words of the lease provided for "an option of renewal every five years." The opinion, citing to Thompson on Real Property, Vol. III, section 1088, p. 313, observed that leases in perpetuity are not favored and will not be so construed unless the intention to give them that effect is expressed in unequivocal terms. The Hutson opinion quoted from 31 A.L.R.2d 607 at 610:

"As indicated by numerous cases discussed or referred to in §§ 3 to 7, inclusive, the courts are loath to construe a covenant for renewal as providing for more than one renewal after the expiration of the original lease, and the language of the lease with respect to renewal must indeed be clear and explicit to impel the court to construe the lease otherwise. Thus, in the absence of unambiguous terminology indicating the intention of the parties to provide for plural renewals, it is generally held that the covenant to renew is satisfied by one renewal, and does not require the insertion of a renewal clause in the instrument under which the lessee in holding subsequently to the expiration of the original lease. In other words, the term "renewal" imports a new lease for the same period of time and on the same terms, but without any covenant for a further extension."

Hutson, supra at 364.

The trustees also rely on language from the Florida Supreme Court case of Sisco v. Rotenberg, 104 So.2d 365, 368 (Fla.1958), which held that the argument that a plaintiff's exercise of his option to renew brought about a new contract with identical provisions of an old contract would have to fail since, "most courts have taken the view a covenant to renew is satisfied by one renewal thereof, due to their disfavor of perpetuities and perpetual leases" (cites omitted). See also Sheradsky v. Basadre, 452 So.2d 599, 603 (Fla. 3d DCA 1984), rev. denied, 461 So.2d 113 (1985).

Johnson asserts in her answer brief that the lease was ambiguous to the extent it did not specify the number of renewals contemplated by the parties, and was therefore subject to construction based on parol evidence. Based on testimony at trial, the trial court concluded that the parties intended that the tenant, Joyce F. Johnson, should have the right to renew the lease in five year intervals during her lifetime.

We agree with the appellant in respect to the term of the lease. Since there is no unambiguous and explicit language in the lease evincing the intent to grant perpetual renewals, or even renewals for Johnson's life, we hold that the lease provides for only two successive five-year renewals--i.e., a maximum potential lease term of fifteen (15) years. See Sisco; Sheradsky; Hutson, supra.

In regard to the second issue raised on appeal, we affirm the trial court's construction of the provision in the contract dealing with rental proceeds.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

GRIFFIN, C.J., concurs and concurs specially with opinion.

W. SHARP, J., concurs in part, dissents in part, with opinion.

GRIFFIN, Chief Judge, concurring specially.

I agree with the majority opinion. Although none of the Florida cases relied upon deal with a "successive renewal" clause like the one in the present case, courts in other jurisdictions not infrequently have had to do so. See Jay M. Zitter, Annotation, Sufficiency of Provision of Lease to Effect Second or Perpetual Right of Renewal, 29 A.L.R.4th 172 (1984). Section 9 of this annotation collects cases dealing with "successive renewal" provisions. Review of these cases reflects that no uniform approach to the interpretation of such clauses exists. Some courts take the approach that, because a lease in perpetuity is disfavored in the law, any ambiguity must be resolved against perpetual renewal. Other courts search for the intent of the parties by scouring every word of the entire lease or by introduction of parol evidence. In the cases cited in the majority opinion, Florida seems to have taken the former approach, requiring a clearly expressed intent that the lease be subject to perpetual renewal. While this rule may in some cases frustrate the intent of the original parties to the lease, ¹ it is important for Floridians to know that a clear intent be expressed in order to encumber real property in such a significant way.

W. SHARP, Judge, concurring in part and dissenting in part.

I respectfully dissent in part, and concur in part. The trial court found the lease provisions ambiguous in many regards, and heard parol testimony as to the parties' intent. Based on that testimony he concluded that the rent calculation should include various items of income to the lessee, and exclude others, based essentially on oral testimony as to what the parties intended, and how the parties had handled the rental calculations, over the years. In this regard I agree the trial court's judgment should be affirmed. See Marion Mortgage Co. v. Howard, 100 Fla. 1418, 131 So. 529 (1930); Schmitt v. Bethea, 78 Fla. 304, 82 So. 817 (1919); U.S. on Behalf of Small Business Administration v. South Atlantic Production Credit Ass'n, 606 So.2d 691 (Fla. 1st DCA 1992); Gorman v. Kelly, 658 So.2d 1049 (Fla. 4th DCA 1995); Royal Dev. and Man. Corp. v. Guardian 50/50 Fund V, Ltd., 583 So.2d 403 (Fla. 3d DCA 1991); Liza Danielle, Inc. v. Jamko, Inc., 408 So.2d 735 (Fla. 3d DCA 1982); Morton v. Morton, 307 So.2d 835 (Fla. 3d DCA), cert. denied, 324 So.2d 90 (Fla.1975); Royal American Realty Inc. v. Bank of Palm Beach & Trust Co., 215 So.2d 336 (Fla. 4th DCA 1968). By the same token, I think the trial court correctly found that the provision for renewal in the lease was inartfully and ambiguously drafted, and therefore it also should be interpreted with the assistance of parol evidence, to carry out the parties' intent. I would affirm the trial court's interpretation that the parties intended indefinite renewals during the lifetime of the lessee, Joyce F. Johnson. On that ground I dissent from the majority's opinion.

Johnson filed a declaratory judgment suit to interpret various provisions of a somewhat in-artfully drawn lease between herself and Joe Thomas Russell (Tommy), as trustee for his incompetent mother, Eleanor. It provided that the lease of the Marine Island Fish Camp would be for a period of five years, commencing June 1, 1992 and ending June 1, 1997. Paragraph 6 stated as follows:

Rights of Extension:

Landlord does hereby grant to Tenant the right to extend this lease for successive five (5) year periods. Such right shall be executed by Tenant giving written notice of intent to exercise right of extension, which written notice shall be delivered to Landlord by certified mail return receipt requested not less than ninety (90) days prior to the termination of the then existing rental. (emphasis supplied)

Clearly this provision contemplates more than one renewal, since it uses the plural form for periods, and talks about notice to extend being delivered ninety days prior to the "then existing rental" term. If more than one extension was contemplated, why are we bound to conclude as the majority opinion does, that only two are permissible? Why not hear parol testimony in an attempt to determine what these parties really meant?

I submit that the rule of construction against perpetual renewals in leases, referenced by the majority opinion to support its only two renewal interpretation of this lease, does not mandate that result in this case. The "black letter law" goes back to ancient legal times. Courts were reluctant to, and leaned over backward not to, interpret a lease with an unlimited renewal clause as providing for eternal, perpetual renewals. ¹ They did not want to burden the fee or the fee owner with such an ongoing tenancy. ² Only where the parties clearly and unambiguously provided for a perpetual renewal right using the words "forever", "in perpetuity", or "infinity", or the like, will some courts give effect to such a clause. ³ This has led to strained constructions and contortions of language on the part of courts to reach such a result. ⁴ But, if the lease is clear and unambiguous, a provision for perpetual renewals is not against public policy, and it will be enforced. ⁵

However, there is a middle ground position for the construction of lease provisions which expressly provide for more than one renewal, but fail to say how many. More than one court has resolved this dilemma by construing the right to renew as being...