THE ESTATE OF PHIL BASILE, APPELLANT,
v.
FAMEST, INC., A FLORIDA CORPORATION, APPELLEE
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The Estate of Phil Basile appeals a judgment holding the decedent liable under a personal guaranty for a commercial lease. The court reverses, finding that because the original tenant transferred its entire interest in the lease (an assignment rather than a sublease), the guaranty terminated by its own terms in November 1995, before the default at issue occurred.
The transfer was an assignment, not a sublease, because BT transferred all of its rights and interest in the property without retaining a reversionary interest. Accordingly, the guaranty terminated by its express terms in November 1995, relieving the decedent of liability for defaults occurring after that date.
[1] A transfer of a lessee's entire interest in a property, without retaining a reversionary interest, constitutes an assignment, not a sublease.
[2] A guaranty agreement that limits personal liability to defaults occurring during specific periods of an original lease or an approved sublease terminates by its own terms…
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Join FLexlaw to unlock all legal intelligence“The test between an assignment and a sublease is whether the lessee transfers his entire interest in the property; if no reversionary interest is retained, the transaction is considered an assignment.”
Establishes the legal standard for distinguishing between assignments and subleases
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Join FLexlaw to unlock all legal intelligencePhil Basile, a stockholder in BT Entertainment, Inc., executed a personal guaranty for a commercial lease between BT and landlord Famest, Inc. The gua…
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POLEN, Judge.
The Estate of Phil Basile (“Estate”) appeals from a partial final judgment which found the Estate liable on a guaranty which, prior to his death, the decedent had executed. The decedent, a stockholder in BT Entertainment, Inc. (“BT”), executed the guaranty in connection with a commercial lease agreement between BT and the landlord of the subject property, Famest, Inc. (“landlord”). The guaranty expressly limited the decedent’s personal liability to defaults occurring during the first two years of the original lease (through November, 1995), or the first three years of any “approved sublease.” It also provided that the tenant had no right to assign the premises without the prior written consent of the landlord.
On April 29, 1996, the landlord consented in writing to BT’s “assignment” of its rights and interest under the lease; however, the consent expressly stated that the landlord did not release BT from liability under the lease. On May 9,1996, BT assigned all of its rights and interests under the lease to another corporation, LM of Ft. Lauderdale, Inc. (“LM”). Thereafter, LM defaulted under the lease.
The landlord subsequently sued the Estate based on the personal guaranty signed by the decedent. At trial, the Estate argued that, because the May 9, 1996 transfer of the lease to LM was, in fact, an assignment and not a sublease, the guaranty, by its own terms, terminated in November, 1995. The trial court disagreed, found the decedent remained liable under the guaranty after BT’s transfer of the subject lease to LM, and awarded damages to the landlord.
The test between an assignment and a sublease is whether the lessee transfers his entire interest in the property; if no reversionary interest is retained, the transaction is considered an assignment. 34 Fla. Jur.2d Landlord & Tenant § 84 (1982); see, generally, Tollius v. Dutch Inns of America, Inc., 244 So. 2d 467, 471 (Fla. 3d DCA 1970) (a sublease is for less than the balance of the term of the basic lease); C.N.H.F., Inc. v. Eagle Crest Dev. Co., 128 So. 844, 845 (Fla.1930)(an assignment by a lessee transfers the unexpired term of the original lease). Because BT transferred all of its rights and interest in the property to LM in May, 1996, the transfer was, in fact an assignment, and not a sublease. As such, the guaranty, by its express language, terminated in November, 1995, relieving the decedent of any liability in the underlying suit. We, therefore, reverse the partial final judgment, and remand for entry of a judgment in favor of the estate as to this issue.
REVERSED.
DELL and TAYLOR, JJ., concur.
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Lauren Kyle Holdings, Inc. v. Heath-Peterson Constr. Corp., 864 So. 2d 55 (Fla. 5th DCA 2003)…d Cas. Co. v. Ray, 556 So. 2d 811 (Fla. 5th DCA 1990). Because an assignment vests in the assignee the right to enforce the contract, an assignor retains no rights to enforce the contract after it has been assigned. Estate of Basile v. Famest, Inc., 718 So. 2d 892 (Fla. 4th DCA 1998). Here, Sago did not transfer to Sunland the right to purchase lots from Peterson; Sunland only obtained the right to purchase lots from Sago. Sago remained liable to sell lots to Sunland even if Peterson defaulted in its obligat…
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The City OF Pensacola v. Seville Harbour, Inc., 219 So. 3d 984 (Fla. 1st DCA 2017)…her pro tanto or full) or a sublease is whether the lessee “transfers [1] his entire interest in [all or part of the leased property] for [2] the unexpired term of the original lease.” Id. (emphasis added); see also Estate of Basile v. Famest, Inc., 718 So. 2d 892, 892 (Fla. 4th DCA 1998) (“The test between an assignment and a sublease is whether the lessee transfers his entire interest in the property; if no reversionary interest is retained, the transaction is considered an assignment.”); but cf. MDS (Canad…
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CO & CO Enters., Inc. v. Robertson, 761 So. 2d 1179 (Fla. 4th DCA 2000)…PER CURIAM. We affirm the dismissal of appellant’s complaint against appellee alleging breach of a lease/sublease agreement. See Estate of Basile v. Famest, Inc., 718 So. 2d 892, 892 (Fla. 4th DCA 1998)(a transfer of the entire interest in the term of the lease without a reversion retained by the original lessee is an assignment of a lease rather than a sublease); see also C.N.H.F., Inc. v. Eagle Crest Dev. Co., 99 Fla. 123…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- C. N. H. F., Inc. v. Eagle Crest Dev. Co., 99 Fla. 1238 (Fla. 1930)
- Gosta Tollius v. Dutch Inns OF Am., Inc., 244 So. 2d 467 (Fla. 3d DCA 1970)