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Ambiguity in Settlement Offer Defeats Florida Commercial Tenant’s Claim for Attorneys’ Fees in Lease Breach Case

magnifying glassIn your commercial lease dispute case, sometimes it may be a small detail that makes all the difference. In a recent South Florida case decided by the Third District Court of Appeal involving a landlord’s action for a breach of the lease agreement, the tenant’s claim for attorneys’ fees fell short even though it had submitted an offer of settlement and had secured a judgment in its favor. The fees claim failed because the offer was not completely clear regarding exactly which issues were (and were not) covered by the settlement, and this technical vagueness made the offer unenforceable.

The dispute pitted a commercial landlord, Sharpe Investment Land Trust Number J, against one of its tenants, South Florida Pool and Spa Corp., regarding South Florida Pool’s tenancy at the Sharpe-owned Miller Heights Shopping Center in Miami. The landlord had filed an eviction action against the tenant, alleging that the tenant was in default with regard to paying its rent.

While that eviction case worked its way through the court system, a fire damaged the property leased by South Florida Pool. At this point, the landlord discovered that the tenant did not have insurance, even though the lease required it to maintain coverage. The landlord added a claim against the tenant for the damages that arose from the lack of insurance coverage.

Ultimately, the eviction claim and the damages claim proceeded as two separate cases. The trial court awarded a summary judgment in favor of the landlord in the eviction case. The tenant appealed that decision, and, while that appeal was going on, it sent the landlord an offer of settlement in accordance with Florida Statutes Section 768.79, regarding the damages case.

Under Florida law, if the recipient of a settlement offer that complies with Section 768.79 does not accept the offer, the party making the offer may be entitled to an award of attorneys’ fees if the court eventually rules in its favor or if the judgment amount is at least 25% less than what the offeror offered.

In this case, the trial court ruled entirely in favor of the tenant on the landlord’s damages claim. This victory in the damages case led the tenant to submit a request asking the court to order the landlord to pay the tenant’s attorneys’ fees. The trial court rejected this request, and the appeals court later upheld that denial.

So, if the court ruled in favor of the tenant, why was it not allowed to recoup its attorneys’ fees? The shortcoming lay in the wording of the settlement documents the tenant sent to the landlord. In addition to its settlement offer, the tenant also sent the landlord a release document attached to it. The problem was that the wording of the settlement offer, when taken together with the language in the release, created an ambiguity regarding whether the tenant’s $15,000 settlement offer included or excluded an attorneys’ fees claim that the landlord had sought in relation to the eviction claim.

Even an ambiguity as minute as this was enough to render the offer of settlement unenforceable. As a result, regardless of the outcome of the damages case, the tenant could not demand an award of attorneys’ fees under Section 768.79 because a valid, enforceable offer of settlement was a pre-requisite to an attorneys’ fees award under that statute.

When it comes to your commercial landlord-tenant dispute, it can often pay to “sweat the small stuff.” To make sure that your side is taking advantage of all the factual and legal details, both great and small, that can strengthen your case, contact the experienced Florida landlord-tenant litigation attorneys at Stok Folk + Kon. Our attorneys have helped commercial landlords and tenants for many years and are ready to put the power of our office to work for you as well.

Contact us online or by calling (305) 935-4440 to schedule your consultation.

More blog posts:

Florida Mall Tenant Launches Class-Action Attack Against Commercial Landlord Over Utility Charges, Florida Business Lawyers Blog, Oct. 21, 2016

Possible Unjust Forfeiture, Cured Defaults Impede Florida Landlord’s Effort to Evict Restaurant-Nightclub Tenant, Florida Business Lawyers Blog, Feb. 19, 2016