WAYNE L. RAUCH, APPELLANT,
v.
CHAMA INVESTMENTS, N.V., A NETHERLANDS ANTILLES CORPORATION, APPELLEE

Fla. 4th DCA | 1994-08-24
No. 93-0751
ANSTEAD and HERSEY, JJ., and MAGER, GERALD, Senior Judge, concur.
641 So. 2d 501 Florida District Court of Appeal, Fourth District (1994) Positive Treatment
Cited by 4 cases

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Synopsis

Broker Wayne Rauch sued for commissions on a commercial lease he procured between Chama Investments (landlord) and Walgreen's (tenant). After twenty years of payments, the parties modified the lease to extend it an additional twenty years without Rauch's involvement. The trial court denied Rauch's claim for commissions on the extended term, but the appellate court reversed, holding that a broker cannot be deprived of earned commissions merely because the landlord unilaterally modified the lease terms.


Holding

The broker is entitled to commissions for the extended term. One party to a contract cannot unilaterally change its terms to deprive another contracting party of benefits for which consideration was given. While brokers are not entitled to commissions on extensions or renewals involving substantially different terms that constitute a 'new' lease, the broker here did not lose entitlement to commissions on the original lease term merely because the parties later modified it.


Headnotes

[1] A broker is entitled to a commission for the full term of a lease, including extensions, as provided in the commission agreement, unless the tenant abandons the premises.

[2] A landlord and tenant cannot unilaterally modify a lease agreement to deprive a broker of earned commissions without legal or equitable justification.

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Key Quotes

“This may result from the fact that it appears almost self-evident that one party to a contract may not unilaterally change the terms of that contract, thereby depriving the other contracting party of the benefits for which consideration has been given.”

Establishes the fundamental principle that parties cannot unilaterally modify contracts to deprive other parties of earned benefits.

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Facts & Procedural History

Rauch, a real estate broker, procured a thirty-year lease between Chama (landlord) and Walgreen's (tenant) and earned a commission of three percent of…

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Opinion of the Court
PER CURIAM.

PER CURIAM.

The issue presented by this appeal is whether appellant, Wayne L. Rauch, a real estate broker, is entitled to a broker’s commission on the somewhat unusual facts of this case. The trial court found that he was not.

The specific identities of the parties varied from time to time, but for the purpose of resolving this appeal it is sufficient to note that Rauch was the broker, Chama was the owner-landlord, and Walgreen’s was the tenant. Through the efforts of Rauch, a thirty-year lease was entered into between the landlord and the tenant. The commission agreement provided that Rauch was to receive three percent of the gross annual rental for the term of the lease “and any extensions thereof.”

Commissions were paid without incident for approximately twenty years. On September 19,1991, with nine years of the original lease term remaining, the landlord and tenant, without any participation by Rauch, entered into a Lease Modification Agreement which increased the amount of rent and ex tended the term for an additional twenty years. The reason for the modification was that Walgreen’s had undergone extensive remodeling in reliance upon the lease being extended. The owner, Chama, refused to continue to make commission payments to Rauch, informing him that it had negotiated a new lease and since he had not been involved in those negotiations, he was no longer entitled to a commission. As indicated earlier, the trial court agreed with the position taken by Chama.

We find no precedent in Florida or elsewhere addressing the precise issue framed by the foregoing factual recitation, nor have the parties offered any. This may result from the fact that it appears almost self-evident that one party to a contract may not unilaterally change the terms of that contract, thereby depriving the other contracting party of the benefits for which consideration has been given. The broker procured a tenant under a contract which then required the landlord to pay him a commission over a fixed term of years. There is simply no theory, in law or in equity, which permits that agreement to be abrogated by one party with impunity. Obviously, if the tenant abandons the premises midterm the commission is no longer payable, but that is entirely aside and distinguishable from the scenario here.

The trial court below and the owner-landlord-appellee here apparently went off on a tangent to conclude otherwise. There is a line of cases holding that a broker is not entitled to a. commission where a lease is extended or renewed with terms substantially different from the original lease, even where the commission agreement purports to include “extensions and renewals.” See Woodard Tire Co. v. Hartley Realty, 596 So. 2d 1114 (Fla 3d DCA 1992), rev. denied, 605 So. 2d 1264 (Fla.1992) (Court held that brokers were not entitled to commission based on the renewal of a lease, because the renegotiation which preceded the renewal changed the rental amount and the lease agreement was no longer the same agreement under which the brokers were entitled to commission); Strano v. Reisinger Real Estate, Inc., 534 So. 2d 1214 (Fla. 3d DCA 1988), rev. dismissed, 542 So. 2d 1334 (Fla.1989) (Court held that brokerage company was not entitled to receive a commission under the new lease, because under the commission agreement, it was only entitled to receive a commission upon renewal, and the new lease was not a renewal because it included new terms, increased acreage and higher rent); Cushman & Wakefield of Florida, Inc. v. Williams, 551 So. 2d 1251 (Fla. 2d DCA 1989) (Court held that a newly negotiated lease agreement styled as “First Amendment to Lease Agreement” was still a new lease notwithstanding its name, and that the brokers who had negotiated the first lease were not entitled to commissions on the second).

None of those cases justify the result reached in this case, that is, depriving the broker of a commission for part of the original term of the lease. Those cases simply decide that the broker’s entitlement ends with the original lease term where an extension of that term involves new and different rights and responsibilities of the landlord and tenant so that in effect a “new” lease has been negotiated. Accordingly, we reverse and remand for further appropriate proceedings.

REVERSED AND REMANDED.

ANSTEAD and HERSEY, JJ., and MAGER, GERALD, Senior Judge, concur.


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Citator

Cited By

  • Levinson v. Carnival Corp., 725 So. 2d 1160 (Fla. 3d DCA 1998)
    …sent and ‘a meeting of the minds’ of all initial parties to the contract whose rights or responsibilities are sought to be affected by the modification.” Tropicana Pools v. Boysen, 296 So. 2d 104, 108 (Fla. 1st DCA 1974); Rauch v. Chama Invs., N.V., 641 So. 2d 501, 502 (Fla. 4th DCA 1994). In the instant case, the Deferred Compensation Agreement clearly and unambiguously stated that Levin-son’s participation in the Deferred Compensation Agreement would not in any way affect or interfere with his right to shar…
  • Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 746 F.3d 1008 (11th Cir. 2014)
    …t to commissions “ends with the original lease term where an extension of that term involves new and different rights and responsibilities of the landlord and tenant so that in effect a ‘new1 lease has been negotiated.” Rauch v. Chama Inva., N.V., 641 So. 2d 501, 502 (Fla. 4th DCA 1994) (per curiam); see Strnno v. Reisinger Real Estate, Inc., 534 So. 2d 1214, 1215 (Fla. 3d DCA 1988) (lease modification was not a “renewal” for purposes of a real estate broker’s entitlement to a commission). Finally, when a…

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