DOUGLAS DILTZ AND VICTORIA DILTZ, HIS WIFE, APPELLANTS,
v.
J & M CORP., A FLORIDA CORPORATION, APPELLEE
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Lessees of a Burger King franchise under a lease providing for rent at 6% of gross sales (with $12,000/month minimum) discontinued their business on the leased premises and relocated to another location, continuing to pay the minimum rent but refusing to account for gross sales at the new location. The appellate court reversed the trial court's judgment of accounting, holding that the lease contained no covenant requiring the lessees to maintain the business on the premises or account for sales elsewhere.
The court held that: (1) the lease contained no provision requiring the lessees to operate or maintain a Burger King business on the demised premises, so discontinuing the business and paying the minimum rent did not constitute a breach; and (2) the lease contained no provision for rent based on gross sales at locations outside the demised premises, so the trial court had no authority to require accounting for such sales.
[1] A lease agreement does not obligate lessees to operate or use their best efforts to maintain a business on the demised premises unless expressly provided for in the lease…
[2] A lessor cannot require an accounting for the gross sales of a lessee's business located outside the demised premises if the lease does not contain a provision for such r…
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Join FLexlaw to unlock all legal intelligence“Nowhere in the lease is there any provision that the lessees should operate or use their best efforts to maintain a Burger King business on the demised premises.”
Establishes the critical absence of a covenant requiring continued operation on the premises, which is the foundation for reversing the judgment.
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Join FLexlaw to unlock all legal intelligenceJ & M Corp. leased premises to Douglas and Victoria Diltz for operation of a Burger King franchise. The lease required rent of 6% of gross sales with …
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PER CURIAM.
By this appeal, we are asked to review a final judgment of accounting entered in favor of a lessor [J & M CORP.] in an action which it brought against its lessees [Douglas and Victoria Diltz] for alleged breach of the rent and accounting covenants of the lease. The lease provided that the rental due thereunder was six percent of the gross sales that the lessees shall obtain by operation of their Burger King business on the demised premises, but that in no event should the rent be less than $12,000 per month; also, the lease contained certain accounting provisions to enforce the gross sale/rental provisions of the lease. Nowhere in the lease is there any provision that the lessees should operate or use their best efforts to maintain a Burger King business on the demised premises. Compare Mayfair Operating Corp. v. Bessemer Properties, Inc., 150 Fla. 132, 7 So. 2d 342 (1942).
Upon expiration of this lease, the same was renewed by the parties for one year. During this one year renewal period with approximately four months to go thereon, the lessees discontinued their Burger King business on the demised premises and moved their franchise to another location several blocks away. The lessees continued to pay the $12,000 rent per month due for the balance of the one year extension of the lease, but declined to pay the lessor six percent of the gross sales of the lessees’ new Burger King business. The final judgment of accounting requires the lessees to do so.
We reverse the final judgment under review upon a holding that: (a) the lessees were not required by the lease to operate or use their best efforts to maintain a Burger King business on the demised premises and, consequently, the lessees did not breach the lease by discontinuing their Burger King business thereon and in thereafter paying the minimum $12,000 monthly rentals; Floste Corp. v. Marlemes, 53 So. 2d 538 (Fla.1951); Stemmler v. Moon Jewelry Co., 139 So. 2d 150 (Fla. 1st DCA 1962); Annot., 40 A.L.R.3d 971, 975 (1971); (b) the lease contains no provision for the payment of rent based on the gross sales of the lessees’ Burger King business located outside the demised premises, and, accordingly, the trial court had no authority under the lease to require an accounting by the lessees as to such gross sales. Arnold v. First Savings and Trust Co. of Tampa, 104 Fla. 545, 140 So. 660 (1932) (syllabus by court no. 4).
The judgment under review is reversed and the cause remanded to the trial court with directions to enter a judgment for the appellant lessees herein.
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Cited By
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Jerrico, Inc. v. Wash. Nat'l Ins. Co., 400 So. 2d 1316 (Fla. 5th DCA 1981)…the parties to the lease. Mayfair Operating Corporation v. Bessemer Properties, 150 Fla. 132, 7 So. 2d 342 (1942); Lincoln Tower Corporation v. Richter’s Jewelry Company, 152 Fla. 542, 12 So. 2d 452 (1943). Appellant relies on Diltz v. J & M Corp., 381 So. 2d 272 (Fla. 3d DCA 1980), and Stemmler v. Moon Jewelry Company, Inc., [*1318] 139 So. 2d 150 (Fla. 1st DCA 1962), for the proposition that a rental based on a percentage of receipts does not imply a covenant to operate the business where there is a substa…
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Cami Inv., Inc. v. Winn Dixie Stores, Inc., 730 So. 2d 851 (Fla. 3d DCA 1999)…PER CURIAM. Affirmed. See Jaar v. University of Miami, 474 So. 2d 239 (Fla. 3d DCA 1985), review [*852] denied, 484 So. 2d 10 (Fla.1986); Diltz v. J & M Corp., 381 So. 2d 272 (Fla. 3d DCA 1980).…
Authorities Cited
- Cassie Ethel Arnold v. First Sav. & Tr. Co. of Tampa, 104 Fla. 545 (Fla. 1932)
- Mayfair Operating Corp. v. Bessemer Props., 150 Fla. 132 (Fla. 1942)
- Colomba Lusardi v. Dade Cnty., 139 So. 2d 150 (Fla. 3d DCA 1962)
- Stemmler v. Moon Jewelry Co., Inc., 139 So. 2d 150 (Fla. 1st DCA 1962)