JOHN PAGLIARULO BUILDING CONTRACTORS, INC., A FLORIDA CORPORATION, AND JOHN A. PAGLIARULO, APPELLANTS,
v.
AVCO FINANCIAL SERVICES LEASING COMPANY, A CALIFORNIA CORPORATION, APPELLEE

Fla. 4th DCA | 1987-09-30
No. 4-86-2969
GLICKSTEIN and WALDEN, JJ., concur.
512 So. 2d 1162 Florida District Court of Appeal, Fourth District (1987)

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Synopsis

A Florida appellate court affirmed a judgment against a contractor for breach of a computer equipment lease, rejecting the contractor's affirmative defense that the lessor failed to mitigate damages by repossessing and reselling the equipment.


Holding

The lessor did not breach a duty to mitigate damages. Upon the lessee's breach, the lessor had three lawful options: terminate the lease and retake equipment for its own account; retake possession and hold the lessee liable for the difference between lease payments and resale proceeds; or do nothing and hold the lessee liable for all accelerated lease payments. The lessor's choice to exercise the third option was within its legal rights.


Headnotes

[1] A lessor, upon a lessee's breach of a lease agreement, may elect to treat the lease as terminated and retake possession for its own account, thereby terminating further l…

[2] A lessor, upon a lessee's breach of a lease agreement, may elect to retake possession of the leased equipment for the account of the lessee and hold the lessee liable for…

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Key Quotes

“Upon the breach by the Defendant of the lease agreement, Plaintiff had the choice of three alternative courses of action. The Plaintiff could treat the lease as terminated and retake possession of the equipment for its own account therefore terminating further liability on the part of the Defendant under the lease; or the Plaintiff could retake possession of the computer equipment for the account of the Defendant and hold the Defendant liable for the difference between the rental provided for in the lease and what in good faith the Plaintiff was able to recover from either selling or releasing the equipment; or the Plaintiff could stand by and do nothing and hold the Defendant liable for the lease payments due as they accrued or all lease payments due pursuant to an acceleration clause.”

Establishes that a lessor has three lawful remedies upon breach and is not required to mitigate by repossessing and reselling.

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Facts & Procedural History

Contractor Pagliarulo leased computer equipment from Burroughs Corporation, which assigned the lease to Avco Financial Services. The total lease price…

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Opinion of the Court
DOWNEY, Judge.

DOWNEY, Judge.

Appellants (contractor) leased a business computer from Burroughs Corporation, which assigned said lease to appellee (Avco). Contractor failed to make the payments due under the contract. Avco notified contractor that the balance due under the contract was accelerated and filed suit for the recovery thereof.

The trial court entered judgment in favor of Avco, which we adopt as the opinion of this court, wherein it found:

1. This action involves a breach of contract pursuant to a lease agreement for certain computer equipment for which this Court has previously rendered a Partial Summary Final Judgment in favor of the Plaintiffs and against the Defendants, JOHN PAGLIARULO BUILDING CONTRACTORS, INC., and JOHN A. PAGLIARULO, individually.

2. The parties stipulated that the total lease price was $29,983.20, for which payments of $12,493.00 were made through October 31, 1983, leaving a balance due of $17,490.20. Defendants raised the affirmative defense of the Plaintiffs failure to mitigate its damages asserting that the Plaintiff had an obligation to retake the computer equipment and sell it in an attempt to minimize the damages obtainable against the Defendants.

3. Upon the breach by the Defendant of the lease agreement, Plaintiff had the choice of three alternative courses of action. The Plaintiff could treat the lease as terminated and retake possession of the equipment for its own account therefore terminating further liability on the part of the Defendant under the lease; or the Plaintiff could retake possession of the computer equipment for the account of the Defendant and hold the Defendant liable for the difference between the rental provided for in the lease and what in good faith the Plaintiff was able to recover from either selling or releasing the equipment; or the Plaintiff could stand by and do nothing and hold the Defendant liable for the lease payments due as they accrued or all lease payments due pursuant to an acceleration clause.

4. The Plaintiffs elected in this case to do nothing and bring suit upon the balance of the lease agreement, which was within Plaintiffs right to so act.

5. In accordance herewith, Plaintiff, AVCO FINANCIAL SERVICES LEASING COMPANY, shall have and recover from the Defendants, JOHN PAGLIAR-ULO BUILDING CONTRACTORS, INC., and JOHN A. PAGLIARULO, individually, the sum of $17,490.20, representing the amount due under the remainder of the lease agreement, $874.51, representing five percent (5%) sales tax on the lease agreement, and interest from November 1,1983, in the amount of $6,610.30, for a total Judgment of $24,-975.01, for which let execution issue.

The judgment is in accord with the law of Florida as set forth in Jimmy Hall’s Morningside, Inc. v. Blackburn & Peck Enterprises, Inc., 235 So. 2d 344 (Fla. 2d DCA 1970).

Accordingly, we affirm the judgment appealed from.

GLICKSTEIN and WALDEN, JJ., concur.


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