Florida Commercial Real Estate Litigation Blog

In the 2015 case of Griffin Industries, LLC v. Dixie Southland Corp., the Fourth District Court of Appeal addressed two issues that frequently arise in landlord-tenant litigation: (i) on what basis a tenant may claim constructive eviction; and (ii) a landlord’s damages after a tenant vacates the premises.

The case involved a lease for a warehouse in Broward County. Griffin leased the warehouse from Dixie for a five year term. Approximately a year and a half into the lease term, the town in which the property was located posted a code compliance notice on the property concerning Dixie’s stormwater management system. Griffin and Dixie corresponded about Dixie’s response to the notice and Dixie ultimately retained an engineer to design a new drainage system on the property. The town closed its file on the code compliance violation after a further inspection of Dixie’s interim measures to address the stormwater.

Nevertheless, a little over a month after the notice was posted, Griffin claimed that the issue had not been addressed and terminated the lease in a written notice. It paid rent for the subsequent month, but not thereafter, and vacated the property. Dixie relet the property about seven months later at a lower monthly rent than what Griffin was paying.

Dixie sued for damages and Griffin counterclaimed for breach of the lease. The trial court awarded Dixie unpaid rent, but not through the end of the lease term, and denied Griffin’s counterclaim. On appeal, Griffin asserted that it was entitled to terminate the lease because Dixie created and did not correct the drainage issue and constructively evicted Griffin as a result. Dixie cross-appealed for the difference in rent for the balance of Griffin’s lease term.

First, the Fourth DCA rejected Griffin’s claims on appeal. Griffin relied on a Third DCA case in which it was undisputed that an illegal condition existed on the premises. By contrast, there was a dispute here as to whether an illegal condition existed and the trial court had ruled that Griffin’s affirmative defenses were “not supported by sufficient credible evidence.” The court noted that a tenant cannot terminate a lease based on constructive eviction unless the premises are “unsafe, unfit, or unsuitable for occupancy for the purposes for which they were leased.” Because the record lacked any evidence of complaints by Griffin about its use of the property because of the alleged condition, the court affirmed the denial of the counterclaim.Second, the court addressed the issue of Dixie’s damages. Finding that the damages clause in an Early Termination Clause was inapplicable, the court looked to the lease’s general default provision. That provision held the tenant liable for all rent if the tenant vacated the lease before the end of the term. The Fourth DCA also looked to the well-established principle that where a tenant breaches before the end of the lease term, the landlord has three options:

1. terminate the lease and retake possession on the landlord’s account;
2. take possession for the tenant’s account, leaving the tenant responsible for the difference between rent and what the landlord recovers by reletting; and.
3. suing as each rent installment comes due or suing for all rent at the end of the lease term.

The court found that Dixie chose the second option by reletting the property and suing Griffin for the rent difference. The court therefore affirmed the judgment in favor of Dixie, but remanded to have the damages recalculated to include the rent difference for the entire balance of Griffin’s lease term.