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A Florida Commercial Tenant Escapes Eviction After Alleging that a Waiver of its Rights Under the Lease Was the Product of Fraud

Whether you are entering into the sale of a business, working out the sale of a parcel of property or establishing a set of terms for a commercial lease, any one of these business activities comes down to a single thing – an underlying contract. The contract is the foundation for the entire transaction and, when a party breaches that agreement’s terms, causing you to suffer harm in the process, then you may have a claim for breach of contract. Pursuing that claim requires the closest attention to detail, as every word in the contract may matter and every decision you make, right down to the attachments you do or don’t include in your breach of contract complaint, can be the difference between success and failure. Experienced South Florida commercial litigation counsel can help you be sure you are best equipped to come out on the side of success in your case.

When it comes to the importance of details, a recent case from Fort Pierce is an example. The case involved a commercial property in that city. A grocery store was the tenant, and the lease agreement gave that tenant the right of first refusal in purchasing the property from the landlords. In 2017, a buyer expressed interest in buying both the grocery business and the property.

According to the grocery, it agreed to waive its right of first refusal. It allegedly did so to facilitate the buyer’s negotiations for the property purchase, but conditioned this waiver on the buyer proceeding with his purchase of the grocery. Allegedly, the buyer was not sincere in his overtures about buying the grocery. According to the tenant, the buyer quickly completed the purchase of the property, knowing that the lease agreement gave any new owner of the property a period of 60 days in which to terminate the lease agreement. After the sale was concluded, the buyer allegedly ceased attempting to buy the grocery and instead began efforts to evict the tenant.

This all led the grocery to sue for breach of contract and fraud, among other things. The buyer proceeded with his eviction action. The trial court eventually sided with the buyer, threw out the grocery’s claims and ordered the eviction.

The appeals court, however, reversed both the dismissal and eviction rulings, and revived the grocery’s case. When your opponent asks the trial judge to throw out your complaint because you “failed to state a claim” under the law, there is a very exact way that request must be analyzed by the court. Specifically, the trial court “must confine itself strictly to the allegations within the four corners of the complaint.” That didn’t happen in the grocery’s situation. The trial judge, in ruling for the buyer, relied on (among other things) an unsigned asset purchase agreement and a signed copy of the grocery’s waiver of right of first refusal. The problem was that neither of these documents was included as attachments to the grocery’s second amended complaint.

The purchase agreement was attached to the original complaint but that complaint was dismissed, which meant it was no part of the current complaint. By using the documents, the judge improperly decided based on “matters outside the pleadings.” Had the purchase agreement been attached to second complaint, the outcome might have been different.

Details matter in commercial litigation and you need counsel who knows when to “Sweat th small stuff.” The skilled South Florida commercial litigation attorneys at Stok Kon + Braverman are here to help, having successfully represented business clients, and protected their interests, for many years.

Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.