BAKER AND COMPANY, FLORIDA, A FLORIDA CORPORATION, APPELLANT,
v.
DAVID GODING, APPELLEE
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Baker and Company appeals a damages award to its former agent Goding for compensation under an employment agreement providing for "10% of the net profits generated in the State of Florida." The court affirmed the judgment, holding that the compensation phrase was ambiguous and that the trial court properly admitted parole evidence and reasonably construed it.
The court held that the compensation phrase is ambiguous in context and that the trial court properly admitted parole evidence to construe it. The trial court's construction was supported by substantial competent evidence and was affirmed.
[1] A contract term is ambiguous when its meaning is doubtful and susceptible of two constructions, especially when considered in reference to the subject matter and circumst…
[2] When contract language is ambiguous, courts will adopt the construction that aligns with logic and reason.
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Join FLexlaw to unlock all legal intelligence“In giving the words and phrases in a contract the natural meaning or that most commonly understood when considered in reference to the subject matter and circumstances, the court must look to the subject matter to which the words relate and the purpose of their use; the intent of the language may vary with the circumstances and such words will not essentially convey the same connotations under all circumstances.”
Establishes the principle for interpreting ambiguous contract language by reference to subject matter and circumstances
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Join FLexlaw to unlock all legal intelligenceBaker and Company is an insurance premium finance business with its home office and most personnel located outside Florida. Goding was employed as Bak…
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NATHAN, Judge.
Baker and Company, Florida, defendant in the trial court, appeals from a final judgment entered after a non-jury trial, awarding David Goding, the plaintiff, damages for his expenses and commission earned pursuant to an employment agreement.
This appeal, as well as the prior appeal in this cause, see Baker and Company, Florida v. Goding, Fla.App. 1973, 277 So. 2d 796, challenges the damages awarded in the final judgment. The record discloses that Baker and Company is in the insurance premium finance business, and that the subject employment agreement, evidenced in writing by a letter from Jim Baker to Goding, provides that Goding, as Baker and Company’s agent, was to receive as part of the compensation for business which he generated, “10% of the net profits generated in the State of Florida.”
Baker and Company contends that “10% of the net profits” is an unambiguous phrase and that the trial court erred in admitting parole evidence to construe it. It further contends that assuming arguendo the term is ambiguous, the trial court manifestly erred in its construction of it. We do not agree with either contention. "
The home office of Baker and Company, which included all executive and sales personnel except Goding is located outside of the State of Florida. It is obvious from the evidence adduced at the trial that the phrase “10% of net profits generated in the State of Florida,” is ambiguous in the context of the subject matter and circumstances herein.
In giving the words and phrases in a contract the natural meaning or that most commonly understood when considered in reference to the subject matter and circumstances, the court must look to the subject matter to which the words relate and the purpose of their use; the intent of the language may vary with the circumstances and such words will not essentially convey the same connotations under all circumstances. Rupp Hotel Operating Co. v. Donn, 1947, 158 Fla. 541, 29 So. 2d 441, 445. Accord: Underwood v. Underwood, Fla. 1953, 64 So. 2d 281. When the language of a contract is ambiguous or its meaning is doubtful so that it is susceptible of two constructions, the courts will approve that construction which comports with logic and reason. Triple E Development Co. v. Floridagold Citrus Corp., Fla. 1951, 51 So. 2d 435, 439.
Although there was a considerable conflict of evidence as to the method of arriving at “10% of the net profit generated in the State of Florida,” we find that there was substantial competent evidence to support the findings of fact of the trial court and the damages awarded.
Accordingly, the final judgment herein appealed is affirmed.
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Wright & Seaton, Inc. v. Prescott, 420 So. 2d 623 (Fla. 4th DCA 1982)…on.” Numerous rules of construction preclude such a stilted reading. First, when ambiguous language “is susceptible of two constructions, the court will approve that construction which comports with logic and reason.” Baker & Co., Florida v. Goding, 317 So. 2d 118, 119 (Fla. 3d DCA 1975). Second, as stated in Bay Management, Inc. v. Beau Monde, Inc., 366 So. 2d 788, 791 (Fla. 2d DCA 1978): In construing a contract the court must consider the objects to be accomplished, and to this end should place itself in…
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R.W. Roberts Constr. Co., Inc. v. ST. Johns River Water Mgmt. Dist. for the Use & Benefit of McDonald Elec. & Repair Serv., Inc., 423 So. 2d 630 (Fla. 5th DCA 1982)…aw Dictionary 73 (rev. 5th ed. 1979). In the instant case, the language of the arbitration clause is ambiguous. When contract language is ambiguous, the courts should give the language a reasonable construction. Baker and Company, Florida v. Goding, 317 So. 2d 118 (Fla. 3d DCA 1975). While judges may differ as indicated in Deutsch, it was not unreasonable to construe the language of the arbitration clause in the present case as showing a lack of mutuality of obligation, and therefore the order did not depart…
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Multitech Corp. v. ST. Johns Bluff Inv. Corp., 518 So. 2d 427 (Fla. 1st DCA 1988)…les designed to aid in contract interpretation come into play. It is fundamental that courts should apply the most commonly understood meaning with regard to the subject matter and circumstances of the contract. Baker and Company, Florida v. Goding, 317 So. 2d 118 (Fla. 3d DCA 1975), cert. denied, 328 So. 2d 840 (Fla.1976). It is equally fundamental that the intention of the parties to a contract should be determined from a consideration of the agreement as a whole; and that all the provisions of the agreemen…
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
- Underwood v. Underwood, 64 So. 2d 281 (Fla. 1953)
- Triple E Dev. Co. v. Floridagold Citrus Corp., 51 So.2d 435 (Fla. 1951)
- Rupp Hotel Operating Co. v. Donn, 158 Fla. 541 (Fla. 1947)
- Hedwig Kitchen v. City OF Jacksonville, 158 Fla. 621 (Fla. 1947)
- Baker & Co. v. Goding, 277 So. 2d 796 (Fla. 3d DCA 1973)