Florida Business Lawyers Blog

A dispute over a commercial loan in a recent case served as the background for a very important lesson in any type of civil litigation. That lesson is that it is also essential to make sure that you are using the correct vehicle for the outcome you want to achieve. In the loan litigation, a lender’s failure to pursue the proper remedy resulted in an unsuccessful outcome both in the trial court and the Court of Appeal. In any commercial litigation, it is important to be strong on the facts, the law and the rules of procedure, which is why it pays to have representation from an experienced South Florida commercial litigation attorney.

The origin of the case was a loan a Palm Beach County entity made to an Orange County property company. As part of that loan transaction, several individuals signed personal guarantees for the loan. The property company allegedly defaulted on the loan and the lender sued the borrowers and all of the individual guarantors in Florida. As the lender began its Florida lawsuit over the loan, it was already involved in litigation with one of the guarantors, T.D., regarding its business dealings with that individual. That ongoing lawsuit, in which T.D. was suing the company for breach of fiduciary duty, fraud and conspiracy, was taking place in New Jersey.

After the lender sued in Florida, T.D. filed a countersuit. In his counterclaim, T.D. alleged several causes of action – and they were almost exactly identical to the causes of action T.D. had alleged in his New Jersey lawsuit. The lender asked the judge in Florida to dismiss the guarantor’s counterclaim on the basis of priority. The trial judge rejected the request and allowed both the lender’s claims and the guarantor’s counterclaims to proceed forward.

A breach of contract lawsuit can lead to a variety of negative consequences. One of those consequences may be a temporary injunction imposed against you. These injunctions may have a powerful negative impact on your business, so it is wise to oppose them vigorously, as one software company successfully did in its recent appellate case. Wherever you are in the litigation process, make sure you have experienced South Florida commercial litigation counsel on your side.

Recently, a software vendor-vendee contract was the source of this kind of dispute and ensuing litigation. A “health, home and travel products” company contracted with a software company for the use of the latter’s software, through which the former could allow its customers to make credit card payments. The merchant often paid its $10,000 monthly obligation late, and missed its June, July and August 2017 payments entirely. At some point, the software company stopped delivering on the services it promised in the contract. According to the merchant, that happened before it missed its June 2017 payment.

The products company sued for breach of contract. Specifically, the merchant alleged that the software company owed it $117,000 that the software company had taken into its merchant services account but failed to distribute to the merchant. When you are sued for breach of contract, the other side may undertake various techniques to achieve an outcome it considers successful. One possible outcome is to file a request for an injunction. An injunction, if granted, would force you to refrain from taking certain actions or else face possible contempt-of-court penalties.

In a commercial lease dispute, the outcome of the case may hinge upon the plaintiff’s ability to prove that the other side’s conduct met the legal standard for a breach of the lease agreement. Even if the plaintiff successfully shows that its opponent breached the contract, the defense may still be able to reduce or eliminate the damages award by succeeding in showing that the plaintiff failed to mitigate its damages. There are many different issues that can decide a commercial lease case. Be prepared for your litigation by making sure you have experienced South Florida commercial leasing counsel on your side.One recent case from Brevard County was an example of such a lease dispute, in which the issue of mitigation of damages was central. The case began when each side accused the other of breaching the lease. The landlord eventually filed two different complaints against the tenant for breaching the lease.

In this case, the key issues were deciding which party breached the lease and when the landlord retook possession of the property. Why was the date of the landlord’s retaking possession so important? It comes down to something called “mitigation of damages.” The law says that, if you are harmed by another party’s breach of contract, you are entitled to recover the damages you suffered, but you are required to take all reasonable steps to reduce your harm.

You do not have to go to extremes or make major sacrifices to mitigate; just take those actions that are reasonable. If, for example, a commercial tenant vacates leased property before the lease term ends (and ceases paying rent), the tenant has breached the lease. If the landlord, however, retakes control of the property and does absolutely nothing, the landlord has failed to mitigate its damages by failing to re-rent the space, and that failure to mitigate may reduce the amount of damages to which the landlord is entitled.

Certainly, it is preferable in any commercial setting to make sure that the terms of any contractual agreement are carefully negotiated and then put down in writing in a clear and accurate written document. Sometimes, though, the reality of business is different, and some commercial agreements are consummated through express oral contracts. Oral contracts are potentially valid and enforceable in the Sunshine State. When the party with whom you’ve contracted breaches your express oral contract, it is extremely important to understand what the law requires in order to achieve a successful result in your breach of contract action; or, more directly, it is important to make sure that you have experienced South Florida commercial litigation counsel to present the arguments you need and pursue the outcome you deserve.Florida courts have made it clear that, to advance a case of breach of an express oral contract, you need only to assert that a contract existed, that you performed, that the other side materially breached, and that the breach caused you to suffer damages. Florida law does not require you to allege, or provide evidence of, monetary consideration. Consideration doesn’t need to be anything of monetary value; it can anything that is a potential detriment to you or a benefit to the other party.

In one recent case from the Tampa Bay area, a commercial real estate company entered into an oral contract with a developer. The oral contract provided that, if the real estate company persuaded CVS pharmacy to lease a Pinellas County property that the developer owned, the developer would pay the real estate company a commission of $150,000. The real estate company allegedly was able to procure the pharmacy giant as a tenant for the property, but, after CVS inked the lease, the developer paid the real estate company nothing.

These allegations that the real estate company made were all it needed to have the necessary requirements to advance a claim of breach of oral contract. Florida requires that all valid and enforceable oral contracts demonstrate a mutual agreement to a definite proposition and avoid leaving any essential terms open. In this case, the real estate company’s allegations said that the two sides had a certain and definite contractual meeting of the minds (namely, a $150,000 commission in exchange for getting CVS to lease the developer’s property). The real estate company also had sufficient assertions to show performance (CVS leased the property) and breach (the real estate company got paid $0). Finally, the real estate company had allegations of financial damages that it incurred in the form of expenses incurred in getting CVS to lease the space, for which the plaintiff received nothing.

Negotiating effective commercial contracts involves many considerations. You must achieve terms that are mutually acceptable. Then you also have to be certain that the terms that end up in black and white comply with the law. Including a provision that violates federal or state law can ultimately lead to an outcome far different than what your contract document says, and different that you want. The key is to get a contract that meets your needs and meets the law’s requirements. At every step in the process, make sure you have an experienced Florida business and commercial representing your interests.

A failure to ensure that all provisions of a contract comply with the law can result in a term in your document being declared void. A case where that was a potential outcome was the dispute that arose after a Coral Gables drywall company signed a subcontractor agreement to perform drywall services for an improvement of a property in Naples. The contractor was an LLC from Detroit, Michigan. The contract included a paragraph that declared that disputes between the two sides “may be submitted to mediation and/or arbitration pursuant to the Construction Industry Rules of the American Arbitration Association.” The provisions also stated that any such arbitration would occur in, or within 20 miles of, Southfield, Michigan.

A dispute eventually did occur, and the subcontractor sued the contractor in Florida for breach of contract. Based upon the contract document, it might seem that the contractor would be entitled to demand arbitration in Michigan. However, as the subcontractor argued, Florida has a statute that says that any term in a contract for improvement of real property that requires legal action against a Florida contractor or subcontractor in someplace other than Florida is “void as a matter of public policy” and unenforceable. Based on that Florida statute, the trial court sided with the subcontractor and declared the arbitration paragraph void.

While one always enters into a business relationship hoping and expecting the best, there are many ways that a commercial leasing arrangement can go wrong. There can be damage to the property, a failure to maintain the property or non-payment of rent. These and more can sometimes trigger a need for litigation. With commercial rent disputes comes the possible need for using the court registry. Whatever challenges your commercial lease dispute poses, make sure you’re prepared with experienced Florida commercial litigation counsel.

One recent South Florida case was just such a dispute between a commercial tenant and a landlord. The business relationship started with a tenant signing a commercial lease to operate a gym in a space in Palm Beach County. The lease dictated an amount of fixed rent the tenant owed. An additional section of the lease provided for some reduction to the tenant’s rent if the space encountered damage and the repairs to that damage impeded the operation of the tenant’s gym. Specifically, the lease stated that the rent “will be reduced proportionately to the extent to which the repair operations interfere with the business conducted on the Premises by Lessee.”

As fate would have it, damage did occur. The property encountered roof problems and, according to the tenant, water damage and debris from roof repairs harmed his business’ gym equipment.

Your sales distribution agreement is undoubtedly a very important contract to you. Whether you are the manufacturer or the distributor, these agreements can be vital to the success of your business. It stands to reason, then, that a breach of the agreement by the other side can be devastating to your business. Generally, proof of a breach will only entitle the injured party to monetary damages although, in some narrow circumstances, an injured party may be entitled to an injunction. To learn more about your array of options if you’ve been harmed by the breach of a commercial agreement, talk to an experienced South Florida commercial litigation attorney about your case.

One recent South Florida case offered a real-life example of a scenario that did not warrant an award of injunctive relief. On Jan. 1, 2017, a medical device company entered into an agreement with a distributor of medical devices. The agreement called for the latter to become an exclusive distributor of the former’s products in a specific sales territory for a period of five years. The agreement contained a clause that barred the distributor from selling products or services that the manufacturer considered to be in competition with its own.

Almost 12 months later, the two entities wound up in court. The manufacturer accused the distributor of breaching the contract. The manufacturer alleged that the distributor tried to unilaterally cancel the agreement and also solicited business on behalf of one of the manufacturer’s chief competitors.