In William Shakespeare’s history play, Henry IV, Part I, the bard wrote the line, “Discretion is the better part of valor.” This quotable quote is one that commercial landlords in Florida might do well to remember when experiencing an urge to use self-help in retaking possession of a leased space. The Fourth District Court of Appeal recently upheld a ruling that a commercial tenant in Palm Beach County was entitled to a multi-million-dollar judgment for a wrongful eviction. By engaging in self-help, the landlord was in violation of the law, and the tenant was entitled to the damages the jury awarded to it. The case points out the severe consequences that can await imprudent landlords and the recovery that can be available to tenants harmed as a result of their landlords’ self-help.
The tenant in this case was Nantucket Enterprises, Inc., a company that leased 20,000 square feet of space in an Embassy Suites hotel in Palm Beach Gardens. The space included a restaurant and lounge, an atrium and gazebo, a ballroom, and two boardrooms. Problems began after the tenant began renovating its restaurant but failed to secure the necessary building permits from the City of Palm Beach Gardens. After the tenant made this error, the city shut the restaurant down and placed red tags on the doors, which meant that the premises were unsafe for occupancy.
What followed after that was a list of “what not to do” as a commercial landlord. On the same day that the city red-tagged the restaurant, the landlord decided to chain and padlock the restaurant and the tenant’s back offices. Shortly thereafter, the landlord had local police remove the tenant’s employees from the property.
This spawned a long-running series of legal actions. The case came down to a trial on the landlord’s breach of lease claim and the tenant’s wrongful eviction claim. The tenant’s wrongful eviction claim centered on its assertion that the landlord violated the law by improperly using “self-help” in the eviction process when it used the chains and padlocks to lock the tenant out of the entirety of the leased space. The judge in the case entered a directed verdict in favor of the tenant on the wrongful eviction claim. The jury deliberated and set Nantucket’s damages at $10.8 million, which included $8.8 million for wrongful eviction and $2 million for conversion.
The landlord appealed, but it failed in most of its arguments. Its first contention was that the trial judge was wrong to find that its use of self-help constituted a wrongful eviction, since the parties had specifically written into the lease a clause allowing the landlord to use self-help. That didn’t work because, under Florida law, the terms of the lease don’t matter. Most forms of self-help, including locking a tenant out of the entire premises, are generally not allowed, and, what’s more, the terms you put in your commercial lease are completely irrelevant to this question. A landlord can only take possession of a rented property if the tenant abandons it, the tenant surrenders it, or a court order authorizes the landlord to act. Florida law makes no provision allowing for self-help just because it is allowed by the lease.
The appeals court also ruled that the landlord was not entitled to take immediate possession just because it terminated the lease. A landlord’s termination of a lease does nothing as far as “dispossessing the tenant” of the property or removing the landlord’s obligation to get a court order before taking possession. The landlord additionally lost on its assertion that it had not fully evicted the tenant because it only locked up part of Nantucket’s space. That argument might have worked, since the issue of partial eviction is one Florida courts have not yet settled, but for another mistake the landlord made when it engaged in self-help. When it had local law enforcement escort all of Nantucket’s employees off the property, that act effectively closed the door on the viability of an argument that the landlord was merely “partially evicting” Nantucket.
A commercial tenant’s breach of its lease agreement can be very frustrating for a landlord. It may even motivate the landlord to want to take possession by the use of self-help. Sometimes your first instinct is not the best. Instead of making a hasty and potentially expensive mistake, consult experienced legal counsel before you act. The knowledgeable Florida landlord-tenant attorneys at Stok Folk + Kon are here to help. Our attorneys have many years of helping commercial landlords and tenants with their breach and eviction issues, and we can provide you with the advice and representation you need.
Contact us online or by calling (954) 237-1777 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
Types of Recovery Available to a Florida Commercial Tenant When the Landlord Breaches the Lease, Florida Business Lawyers Blog, June 26, 2015