EDGAR Z. WELLS, APPELLANT,
v.
L. A. DUNGEY, APPELLEE
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Wells leased commercial property to Dungey, who abandoned the lease after about one year. The trial court held that a $1,000 security deposit constituted liquidated damages limiting Wells's recovery. The appellate court reversed, holding that the security deposit was not intended as liquidated damages and could only offset actual damages from the abandonment.
The court held that the $1,000 security deposit was not intended to be liquidated damages. Instead, the security deposit retained by Wells could be applied to offset the actual damages incurred from Dungey's abandonment of the lease until Wells was able to relet the property.
[1] A security deposit is not presumed to be liquidated damages in the event of a lease abandonment unless the lease agreement clearly and unequivocally expresses such intent…
[2] A security deposit may be used by a lessor to offset damages incurred from a lessee's abandonment of a lease until the property is relet.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“The lease provided for what purposes the security deposit was to be used and the evidence does not reveal that it was intended to be utilized as liquidated damages.”
Establishes the court's key reasoning that the security deposit's specified purposes preclude treating it as liquidated damages absent clear intent.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceWells and Dungey executed a five-year commercial lease agreement on July 10, 1975, with monthly rent of $1,000 due on the 15th of each month. The leas…
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MASON, Associate Judge.
Wells seeks review of a final judgment denying his claim for damages predicated upon Dungey’s breach of a lease agreement. We reverse.
Wells leased commercial property to Dun-gey by a lease agreement executed July 10, 1975. The lease was for a term of five years beginning August 15, 1975, with rent payments in the amount of $1,000 per month due and payable on the 15th of each month. The lease also provided that an additional $1,000 was to be paid “as security deposit” which also could “be used as partial down payment if lessee buys property or if not last month’s rent.” Around September of 1976, Dungey abandoned the property. Wells received payment from Dungey pursuant to the lease for the period up to September 15, 1976. Although Wells retook possession of the property after Dungey’s abandonment, he was unable to negotiate a new lease on the property until September 1, 1977. Wells brought suit against Dungey seeking damages incurred as a result of Dungey’s breach of the lease agreement.
The trial court found that the $1,000 security deposit set forth in the lease agreement was intended as liquidated damages to be retained by the lessor, Wells, in the event of abandonment of the lease by the lessee, Dungey. Since Wells had retained the $1,000 as liquidated damages, the court found that Wells was entitled to no further relief.
We find that the trial court erred in his determination that the $1,000 security deposit was intended to be liquidated damages to be retained by the lessor in the event of abandonment of the lease by the lessee. Cf. Miami Beach Vacations, Inc. v. Wofford, 262 So. 2d 683 (Fla.3d DCA 1972). The lease provided for what purposes the security deposit was to be used and the evidence does not reveal that it was intended to be utilized as liquidated damages. The security deposit retained by Wells may, of course, be used to offset the damages he incurred from Dungey’s abandonment of the lease until Wells was able to relet the property. The final judgment is reversed and the cause is remanded to the trial court to enter a judgment in favor of Wells for damages as determined by the court.
MILLS, Acting C. J., and ERVIN, J., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Miami Beach Vacations, Inc. v. Olive H. Wofford, 262 So. 2d 683 (Fla. 3d DCA 1972)