N.E.P. INTERNATIONAL, INC., A FLORIDA CORPORATION, APPELLANT,
v.
MICHAEL FALLS, APPELLEE
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A tenant breached a commercial lease, and the lessor recovered judgment for all future rent under an acceleration clause. The appellate court reversed and remanded because the trial court failed to reduce future damages to present value and failed to provide for an accounting to credit the tenant for any rent the lessor received from re-letting or from eminent domain proceeds.
The trial court erred in failing to reduce future damages to present value and in failing to provide for an eventual accounting to credit the lessee with any rent received from re-letting or overpaid charges. However, the error was harmless in this case because the property was taken by eminent domain within twenty days, making damages immediately due, so present value reduction was unnecessary on remand.
[1] Future damages for breach of a lease must be reduced to present value.
[2] A judgment for future rent must include a provision for an eventual accounting to credit the lessee with any rent received by the lessor from re-letting the property.
Previewing 2 of 5 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 only recoverable element of the plaintiffs (lessor's) claim to future monetary losses is their present value”
Establishes the fundamental principle that future damages must be discounted to present value to account for the time value of money.
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Join FLexlaw to unlock all legal intelligenceN.E.P. International, Inc., a tenant, breached a commercial lease with Michael Falls, the lessor. Falls obtained a judgment under an acceleration clau…
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HERSEY, Judge.
Pursuant to an acceleration clause in the lease, Michael Falls, appellee and successor in interest to the lessor, recovered a judgment against appellant tenant, N.E.P. International, Inc., after the tenant breached the lease. The appellee was awarded the full amount of rent, including charges and real estate taxes, for the unexpired term of the lease. After the breach, but before the expiration of the lease term, the premises were taken by eminent domain, which was a possibility always in the contemplation of the parties and one which was provided for in the lease.
Having given careful consideration to each argument advanced by appellant, we conclude that the trial court erred in only two respects.
First, the trial court failed to reduce future damages for breach of the lease to present value. Rent, taxes and charges constituting damages for future injury must be reduced to present value because, as the third district pointed out in Vibrant Video, Inc. v. Dixie Pointe Assocs., 567 So. 2d 1003, 1004 (Fla. 3d DCA 1990), “the only recoverable element of the plaintiffs (lessor’s) claim to future monetary losses is their present value.” This error requires reversal. The final judgment was flawed in one other respect. When a judgment is recovered for future rent there must be a provision for an eventual accounting to credit the lessee with any rent received by the lessor from re-letting the property or with any overpayment of real estate taxes and other charges paid due to an overestimation of such taxes and charges. See, e.g., Beck v. Snow, 60 So. 2d 624 (Fla.1952); Quintero Chadid Corp. v. Gersten, 582 So. 2d 685 (Fla. 3d DCA 1991).
This principle also applies to the payment of rent, taxes or other charges the lessor collected for any period following a taking of property by eminent domain. It is sufficient for the purposes of this rule simply to include a provision for an eventual accounting. It is not essential that the court retain jurisdiction since the lessee is entitled to bring an independent action for the accounting and recover appropriate credits once those ripen by the passage of time. On the other hand, where the lease has only a relatively short period to run, judicial economy may best be served by reserving jurisdiction to entertain a motion for appropriate credit upon application by the lessee.
In the present case the error is harmless. The twenty days from the entry of an order of taking has passed, thereby precipitating the right to credit. On remand the trial court can take this into account and fashion a remedy by recomputing damages as rent and charges due from the date of breach to the date of taking. Since those damages are now due, or past due, it will not be necessary to reduce them to present value. It will, however, be appropriate to award prejudgment interest from the date of the breach.
REVERSED AND REMANDED.
GUNTHER and WARNER, JJ., concur.
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Falls v. Nat'l Env't Prods., 665 So. 2d 320 (Fla. 4th DCA 1995)…”) in an unlawful de-tainer action. We grant certiorari and quash the opinion and decision of the circuit court. The record reflects that the parties to this litigation “have had their day in court” and more. See, e.g., N.E.P. Int’l, Inc. v. Falls, 629 So. 2d 1019 (Fla. 4th DCA 1993); National Envtl. Prods., Ltd., Inc. v. N.E.P. Int’l, Inc., 647 So. 2d 122 (Fla. 4th DCA 1994); N.E.P. Int’l, Inc. v. Falls, 659 So. 2d 1099 (Fla. 4th DCA 1995). Nevertheless, despite the lengthy and complex procedural history inv…
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Falls v. N.E.P. Int'l, Inc., 678 So. 2d 867 (Fla. 4th DCA 1996)…ourt against NEP, as tenant-in-possession of the Sunrise property. In December 1993, this court entered its opinion in the breach-of-lease case, finding errors only in the calculation of certain elements of damages. See N.E.P. Int’l, Inc. v. Falls, 629 So. 2d 1019 (Fla. 4th DCA 1993). The directions on remand were specific and limited to a recalculation of a portion of the damages. N.E.P. International and NEP claimed that as a result of this court’s reversal of the final judgment, Falls’ deed to the Sunrise…
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- Quintero-Chadid Corp. v. Gersten, 582 So. 2d 685 (Fla. 3d DCA 1991)
- Vibrant Video, Inc. v. Dixie Pointe Assocs., 567 So. 2d 1003 (Fla. 3d DCA 1990)