HAROLD THOMPSON AND MARION THOMPSON, HIS WIFE, APPELLANTS,
v.
C.H.B., INC., A FLORIDA CORPORATION, APPELLEE
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
The court held that travel expenses incurred by the Thompsons constituted reimbursable "out-of-pocket expenses" under the management agreement.
[1] Travel expenses incurred by managers in furtherance of a corporate purpose constitute "out-of-pocket expenses" for reimbursement purposes when the management agreement do…
[2] Contractual terms should be interpreted according to their natural meaning and in a manner consistent with reason, probability, and the practical aspects of the transacti…
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligenceThe Thompsons managed apartments for C.H.B., Inc. under an agreement that allowed reimbursement for out-of-pocket expenses. The trial court disallowed…
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Explore caselaw by topic → Browse Out-Of-Pocket Expenses cases and more on FLexlaw
WALDEN, Judge.
This appeal involves alleged breaches of a management agreement between Mr. and Mrs. Thompson and C.H.B., Inc. The Thompsons contracted to manage and improve certain corporate owned apartments. Judgment for $48,233.68 was entered against the Thompsons. They appeal. We affirm in part and reverse in part.
The agreement and the accountings under it were somewhat complicated. We have examined the record in light of the appellate treatment and find no reversible error demonstrated except for the matter of travel expenses.
The management agreement provided:
(1) The Thompsons would manage the apartment building and be responsible for renting, collecting the rent, paying the bills and maintaining the building.
(2) The Thompsons would open a checking account and deposit therein all rental receipts and pay all bills out of this account. In addition, if the expenses of the building exceeded its income, the Thomp-sons were to make up such deficiencies and be reimbursed after the sale.
(3) The Thompsons were to fix up the building to prepare it for sale and to obtain the highest rental possible.
(4) The Thompsons were to put the building up for sale and sell it for no less than $150,000.
(5) As compensation the Thompsons were to be reimbursed for any out of pocket expenses they incurred and receive 80% of the first $20,000 of net profits and 50% of the net profits over $20,000 that were obtained in the sale of the building. (Emphasis added)
The apartments were located at Cape Canaveral. The Thompsons lived in Fort Lauderdale. Between October, 1974, through March, 1975, the Thompsons commuted back and forth between the two places. In March, 1975, Mrs. Thompson moved to Cape Canaveral so as to manage. Mr. Thompson continued to commute on weekends and during his vacation.
The apartments were purchased for $94,000.00. The Thompsons successfully managed and made substantial improvements to the property. In February, 1980, the apartments were sold for $234,000.00. There was disagreement as to the amounts of disbursements made by the Thompsons to themselves including the sum of $4,963.00 which, over the course of time, they had disbursed to themselves as travel expenses. This suit reflects that disagreement. The trial court disallowed the disbursements for travel expenses.
The Thompsons computed their travel expenses on the basis of $20.00 per trip. There is no dispute as to the reasonableness of that sum and we would simply note, based on everyday experience, that the sum is minimal, to say the least. Also, there is no dispute as to the number of trips made or their necessity.
Peripherally, one of the predecessor managers was paid $30.00 per week for travel expenses. Whenever any of the shareholders traveled from south Florida up to see the apartments, they were reimbursed from corporate funds for travel expenses. In other words, the Thompsons just continued the pre-existing practice and there was never any objection to such reimbursements during the five years the Thompsons were reimbursing themselves from corporate funds.
The trial court disallowed travel expenses based upon its interpretation of the contract.
Looking back to the contract, there are two salient provisions. First, the Thomp-sons were to be reimbursed for any “out-of-pocket expenses” and such expenses were not otherwise defined or limited. Second, in addition, the Thompsons were to be paid for their efforts, upon sale, 80% of the first $20,000.00 of net profit and 50% of the net profit over $2,000.00.
Perhaps understandably, the Thompsons contend that travel costs were out-of-pocket expenses. The corporation contends oth erwise and that the percentage of profits provided for the Thompsons cover such expenses.
We hold that the travel expenses here constituted out-of-pocket expenses so as to entitle the Thompsons to reimbursement. With no help contained in the contract as to what was intended by “out-of-pocket expenses,” we give the term its literal meaning and say that it means money coming out of the Thompsons' pocket in furtherance of the corporate purpose. The purchase of gasoline and payment of turnpike fees so as to travel from home a distance of about 185 miles to the work site certainly entailed reaching into the Thompsons’ pocket for such funds.
A court should arrive at a contract interpretation consistent with reason, probability, and the practical aspect of the transaction between the parties. Bay Management, Inc. v. Beau Monde, Inc., 366 So. 2d 788 (Fla. 2d DCA 1978). Words should be given their natural meaning or the meaning most commonly understood in relation to the subject matter and circumstances, and reasonable construction is preferred to one that is unreasonable. Sheldon v. Tiernan, 147 So. 2d 167 (Fla. 2d DCA 1962), affirmed in part, reversed in part, 191 So. 2d 87 (Fla. 4th DCA 1966).
We affirm in part; reverse in part; and remand for further proceedings consistent herewith.
LETTS and HURLEY, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
-
Hoyte S. Whitley and Martha R. Whitley v. Royal Trails Prop. Owners' Ass'n, Inc., 910 So. 2d 381 (Fla. 5th DCA 2005)…ner’s Ass’n, Inc. v. Pelletier, 620 So. 2d 786, 788 (Fla. 4th DCA 1993). The court should reach a contract interpretation consistent with reason, probability, and the practical aspect of the transaction between the parties. Thompson v. C.H.B., Inc., 454 So. 2d 55, 57 (Fla. 4th DCA 1984). When two or more documents are executed by the same parties at or near the same time, in the course of the same transaction, and concern the same subject matter, they will be read and construed together. Courtesy Auto Group…
-
Golf Scoring Sys. Unlimited, Inc. v. Remedio, 877 So. 2d 827 (Fla. 4th DCA 2004)…4th DCA 1999). “Words should be given their natural meaning or the meaning most commonly understood in relation to the subject matter and circumstances, and reasonable construction is preferred to one that is unreasonable.” Thompson v. C.H.B., Inc., 454 So. 2d 55, 57 (Fla. 4th DCA 1984). Under Florida law, a forum selection clause is considered mandatory where it requires “ ‘that a particular forum be the exclusive jurisdiction for litigation concerning the contract.’ ” Granados Quinones, 509 So. 2d at 274…
-
Tropabest Foods, Inc. v. State, 493 So. 2d 50 (Fla. 1st DCA 1986)…pproximately” means “more or less but about and near the amount or quantity specified.” Black’s Law Dictionary, 5th ed. (1979). Words in an instrument should be [*52] given their natural or most commonly understood meaning. Thompson v. C.H.B., Inc., 454 So. 2d 55 (Fla. 4th DCA 1984). Because 3.5 gallons is not “about and near the quantity specified,” i.e. 1 gallon, Bernard’s bid on these items was at variance with the specifications therefor. However, although a bid containing a material variance is unaccep…
Previewing 3 of 10 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- BAY Mgmt., Inc. v. Beau Monde, Inc., 366 So. 2d 788 (Fla. 2d DCA 1978)
- Sheldon v. Tiernan, 147 So. 2d 167 (Fla. 2d DCA 1962)
- Tiernan v. Sheldon, 191 So. 2d 87 (Fla. 4th DCA 1966)