IN THE SUPREME COURT OF FLORIDA CASE NO. SC

IN THE SUPREME COURT OF FLORIDA CASE NO. SC08-1455 OLEN PROPERTIES CORPORATION, L.T. CASE NOS.: a Florida corporation, OLEN RESIDENTIAL 4DCA NO. 4D07-2592 REALTY CORPORATION, a foreign 15th Cir. Ct. No. 50-2006CAcorporation all licensed to do business in 002080XXXXMB Florida, v. Petitioners, SAMANTHA S. MOSS, as Class Representative of those similarly situated, Respondent. / RESPONDENT S BRIEF ON JURISDICTION JANE KREUSLER-WALSH and THEODORE BABBITT REBECCA MERCIER VARGAS JOSEPH JOHNSON of BARBARA J. COMPIANI of BABBITT, JOHNSON, OSBORNE KREUSLER-WALSH, COMPIANI & LeCLAINCHE, P.A. & VARGAS, P.A. 1450 Centrepark Boulevard, Suite 100 501 South Flagler Drive, Suite 503 West Palm Beach, FL 33401 West Palm Beach, FL 33401-5913 (561) 684-2500 (561) 659-5455 and ROD TENNYSON of ROD TENNYSON, P.A. 1450 Centrepark Boulevard, Suite 100 West Palm Beach, FL 33401 (561) 478-7600

TABLE OF CONTENTS Page Preface 1 Statement of the Case and Facts 1 Summary of Argument 3 Argument 5 THE FOURTH DISTRICT S DECISION DOES NOT CONFLICT WITH CASES REGARDING THE INTERPRETATION OF CONTRACTS, THE COMMON LAW ON LIQUIDATED DAMAGES, OR STATUTORY CONSTRUCTION. A. There is no conflict with contract interpretation cases. 5 B. There is no conflict with liquidated damages decisions. 6 C. There is no conflict with decisions applying general canons of statutory construction. 8 Conclusion 10 Certificate of Service 11 Certificate of Font 12 i

TABLE OF CITATIONS Case Page Bellaire Secs. Corp. v. Brown, 168 So. 625 (Fla. 1936) 5 Bd. of Trs. of the Internal Improvement Trust Fund v. Sand Key Assocs., Ltd., 512 So. 2d 934 (Fla. 1987) 9 Green v. Life & Health of Am., 704 So. 2d 1386 (Fla. 1998) 5 Hardee v. State, 534 So. 2d 706 (Fla. 1988) 1 Hutchison v. Tompkins, 259 So. 2d 129 (Fla. 1972) 6, 7 Hyman v. Cohen, 73 So. 2d 393 (Fla. 1954) 6, 7 Lefemine v. Baron, 573 So. 2d 326 (Fla. 1991) 2, 3, 6, 7 Mancini v. State, 312 So. 2d 732 (Fla. 1975) 5 Olen v. Props. Corp. v. Moss ( Olen I ), 981 So. 2d 515 (Fla. 4th DCA 2008) 1 Olen Props. Corp. v. Moss ( Olen II ), 984 So. 2d 558 (Fla. 4th DCA 2008) passim Rodeway Inns of Am. v. Alpaugh, 390 So. 2d 370 (Fla. 2d DCA 1980) 5, 6 Savage v. Horne, 31 So. 2d 477 (Fla. 1947) 5 ii

TABLE OF CITATIONS, CONT D Case Page Smalley Transp. Co. v. Moed s Transfer Co., 373 So. 2d 55 (Fla. 1st DCA 1979) 9, 10 Stuco Corp. v. Gates, 145 So. 2d 527 (Fla. 2d DCA 1962) 6 Thornber v. City of Fort Walton Beach, 568 So. 2d 914 (Fla. 1990) 9 Statutes 83.40-.682, Fla. Stat. 2 83.47, Fla. Stat. 3 83.575, Fla. Stat. 8 83.595, Fla. Stat. 2, 3, 8, 10 iii

PREFACE Respondent/plaintiff, Samantha S. Moss, as class representative of those similarly situated, is a residential tenant who brought an action against her landlord, petitioners/defendants, Olen Properties Corporation, a Florida corporation, and Olen Residential Realty Corporation, a foreign corporation (referred to collectively as Olen ). Olen seeks review of the Fourth District s decision in a non-final appeal from an injunction. See Olen Props. Corp. v. Moss, 984 So. 2d 558 (Fla. 4th DCA 2008) ( Olen II ) (A:1-5). 1 The parties are referred to as Moss and Olen. The citations to the Fourth District s decision are to the appendix attached to Olen s jurisdictional brief (A:1-5). The abbreviation (OJB: ) refers to Olen s jurisdictional brief. All emphasis is supplied unless stated otherwise. STATEMENT OF THE CASE AND FACTS Moss must restate the statement of case and facts because Olen improperly includes facts not found within the four corners of the Fourth District s decision. See, e.g., Hardee v. State, 534 So. 2d 706, 708 n.* (Fla. 1988). 1 In pending case number SC08-1201, Olen seeks to invoke this Court s jurisdiction over the Fourth District s decision in an earlier non-final appeal from an order determining that a case and controversy exists and certifying a class action. See Olen v. Props. Corp. v. Moss, 981 So. 2d 515 (Fla. 4th DCA 2008) ( Olen I ). Moss filed a brief opposing jurisdiction in that case. 1

Moss brought a class action against her residential landlord, Olen (A:1-2). Moss challenged certain fees in her lease as illegal under the common law and statutes, including the Florida Residential Landlord and Tenant Act, 83.40-.682, Florida Statutes (the Residential Landlord-Tenant Act ) (A:1-4). Moss moved to enjoin Olen from enforcing paragraph 16 of Olen s form residential lease (A:1). 2 Paragraph 16 concerns default by a tenant, and generally reserves to the landlord all rights provided under state law... including the right to terminate the Lease, retake possession of the premises, and recover damages. (A:1-2). This paragraph also provides that tenants who leave before the end of the term shall be obligated to the landlord for an amount equivalent to 3 months rent which amount shall operate as liquidated damages. (A:2). Moss argued that paragraph 16 was illegal because it violated the common law on liquidated damages and section 83.595, Florida Statutes, of the Residential Landlord-Tenant Act (A:2-4). The trial court agreed and enjoined Olen from enforcing paragraph 16 of its lease (A:1). The Fourth District held that paragraph 16 violated the common law limitations on liquidated damages set forth in Lefemine v. Baron, 573 So. 2d 326 (Fla. 1991) (A:3). The Fourth District reasoned that LeFemine holds that a liquidated damages 2 Moss also moved to enjoin Olen from enforcing paragraph 6 of the lease (A:1). Olen does not argue that the Fourth District s discussion of paragraph 6 establishes direct and express conflict. As a result, it is not relevant to this 2

clause is unenforceable if a party to a contract gives itself the option of choosing liquidated damages or bringing suit for actual damages. (A:3). The Fourth District concluded that paragraph (16) violated Lefemine, rendering the liquidated damage provision of three months rent a nullity (A:3). The Fourth District also concluded that paragraph 16 violates the Residential Landlord-Tenant Act (A:3-4). The Fourth District held that Olen s attempt to create a liquidated damage remedy violated section 83.595(1), which sets out the total universe of choices available to a landlord when a tenant has not completed the term of a lease (A:3). As a result, [a]n inference must be drawn that the legislature intended to omit or exclude damage remedies not included by special reference. (A:3). Leases are void and unenforceable if they waive or preclude the rights, remedies or requirements set forth in the Residential Landlord-Tenant Act (A:2) (quoting section 83.47(1)(a), Florida Statutes). The Residential Landlord-Tenant Act provides that it is enforceable by civil action, including actions for injunctive relief (A:2). The Fourth District affirmed the injunction barring Olen from enforcing paragraph 16 of the lease (A:3-4). Olen filed a notice to invoke this Court s discretionary jurisdiction based on direct and express conflict. SUMMARY OF ARGUMENT proceeding. 3

The Fourth District affirmed the order which enjoined Olen, a residential landlord, from enforcing a paragraph in its form lease that applies when a tenant breaches the lease by leaving the premises early. The lease gave Olen the right to recover three months rent as liquidated damages and reserved to Olen the right to bring an action for actual damages. The Fourth District held this paragraph illegal on two grounds: (1) it violated common law restrictions on liquidated damages clauses because it reserved to Olen the option to pursue either liquidated or actual damages; and (2) it violated the Residential Landlord-Tenant Act, which sets forth three exclusive remedies available to a residential landlord in these circumstances. Olen raises three grounds for conflict jurisdiction. All lack merit. First, there is no conflict with decisions setting forth general principles of contract construction, which do not involve similar facts and recognize that parties cannot enforce illegal contracts. Second, there is no conflict with cases setting forth the common law rule governing liquidated damages. The decision correctly applied the common law rule that a party may not enforce a liquidated damages clause if the contract reserves the right to recover actual damages. Third, there is no conflict with decisions setting forth general principles of statutory construction. The cited cases do not determine the same issues of fact and law differently than the Fourth District s decision. There is no conflict. 4

ARGUMENT THE FOURTH DISTRICT S DECISION DOES NOT CONFLICT WITH CASES REGARDING THE INTERPRETATION OF CONTRACTS, THE COMMON LAW ON LIQUIDATED DAMAGES, OR STATUTORY CONSTRUCTION. A. There is no conflict with contract interpretation cases. Olen first argues that the decision conflicts with decisions stating that courts will not rewrite a contract to relieve a party from a bad bargain (OJB:5) (citing Savage v. Horne, 31 So. 2d 477 (Fla. 1947), Bellaire Securities Corp. v. Brown, 168 So. 625 (Fla. 1936), Green v. Life & Health of America, 704 So. 2d 1386 (Fla. 1998), and Rodeway Inns of America v. Alpaugh, 390 So. 2d 370 (Fla. 2d DCA 1980)). None of the cited decisions resolves the same issues of fact and law differently than Olen II. As a result, there is no conflict. See, e.g., Mancini v. State, 312 So. 2d 732, 733 (Fla. 1975). Consistent with the Fourth District s decision, the cited cases recognize that parties cannot enter illegal contracts. See Green, 704 So. 2d at 1390; Rodeway, 390 So. 2d at 372. 3 Instead, parties are only free to enter a contract so long as there is 3 The other cited cases do not establish conflict because they involve a very different factual context, see Savage, 31 So. 2d at 480-82 (allowing the buyer to bring an action for rescission of a contract to buy real property where the seller refused to 5

nothing void as to public policy or statutory law about such a contract. Green, 704 So. 2d at 1390-91. While the decision in Rodeway states that courts will not generally rewrite contracts, it involves a commercial lease. 390 So. 2d at 371-72. The Rodeway decision recognized that the Residential Landlord-Tenant Act permits courts to override the terms and conditions of residential leases if they are deemed inequitable. Id. at 372. Consistent with these decisions, the Fourth District refused to enforce an illegal provision of a residential lease that violated the common law on liquidated damages and the Residential Landlord-Tenant Act (A:1-4). There is no conflict with the cited cases, which recognize that parties cannot enforce illegal contracts. B. There is no conflict with liquidated damages decisions. Olen next claims that the Fourth District s decision conflicts with cases allowing liquidated damages (OJB:5-7) (citing Lefemine, 573 So. 2d at 329-30, Hyman v. Cohen, 73 So. 2d 393 (Fla. 1954), Stuco Corp. v. Gates, 145 So. 2d 527 (Fla. 2d DCA 1962), and Hutchison v. Tompkins, 259 So. 2d 129 (Fla. 1972)). None of the cited cases resolves the same issue of fact and law differently than the Fourth District s decision. Instead, the Fourth District correctly applied the common law rule governing liquidated damages. turn over the title and then tried to keep both the land and the purchase price), or do not stand for the cited proposition at all, see Bellaire, 168 So. at 639-40. 6

In a valid liquidated damages provision, the parties stipulate in advance to an amount to be paid or retained as liquidated damages in the event of a breach. Lefemine, 573 So. 2d at 328; see Stuco Corp., 145 So. 2d at 531 (requiring that actual damages would be uncertain or difficult to ascertain at the time of contracting); see also Hutchison, 259 So. 2d at 132 (allowing the liquidated damage clause to stand if the damages are not readily ascertainable at the contract is drawn ). A contract cannot give a party the choice of enforcing a liquidated damages provision or seeking actual damages. Lefemine, 573 So. 2d at 329-30. This type of option negate[s] the intent to liquidate damages because neither party intends the stipulated sum to be the agreed-upon measure of damages. Id. at 330; see Hyman, 73 So. 2d at 401-02 (recognizing that a liquidated damages provision cannot give one party the option either to retain the deposit as his liquidated damages or to apply it pro tanto against his actual damages, [because] such a provision by its very terms negatives an intention to liquidate damages in advance and cannot be upheld as such ). The Fourth District s decision does not conflict with these cases and correctly held that the decision in Lefemine prohibits a landlord from giving itself the option of choosing liquidated damages or bringing suit for actual damages (A:3). Paragraph 16 of the lease violates Lefemine because it reserves to Olen the right to.. 7

. recover damages and the right to recover an amount equivalent to 3 months rent which amount shall operate as liquidated damages. (A:1-3). Olen s reliance on Hyman, as allowing liquidated damages in the landlordtenant context, is misplaced. That case involved a commercial lease. 73 So. 2d at 394. Commercial leases are not subject to the Residential Landlord-Tenant Act, which controls this litigation. Nothing in the Fourth District s decision conflicts with the cited cases. C. There is no conflict with decisions applying general canons of statutory construction. Olen next challenges the Fourth District s conclusion that the Residential Landlord-Tenant Act eliminated the ability of residential landlords to enforce liquidated damages provisions when a tenant breaches the lease (OJB:7-9). According to Olen, this holding conflicts with cases setting forth general canons of statutory construction (OJB:7-9). None of the cited cases interprets the Residential Landlord- Tenant Act; thus, none involves the same issues of fact and law as Olen II. The Fourth District concluded that section 83.595 expressly describes the landlord s three options following a tenant s breach and vacation of the leased premises, demonstrating an intent to omit or exclude damage remedies not included by special reference (A:3-4). As support, the court recognized that the Florida Legislature declined to adopt a provision included in the Uniform Residential Landlord and Tenant Act providing that it is supplemented by principles of law and 8

equity unless displaced by the provisions of this Act (A:4). The court also noted that the legislature specifically allowed for liquidated damages in section 83.575(2), Florida Statutes (2007), which does not apply to the situation covered by paragraph (16). (A:4 n.2). Olen first argues that the Fourth District s decision conflicts with cases applying the canon of construction that statutes are presumed not to abrogate the common law (OJB:7) (citing Thornber v. City of Fort Walton Beach, 568 So. 2d 914 (Fla. 1990), and Board of Trustees of the Internal Improvement Trust Fund v. Sand Key Associates, Ltd., 512 So. 2d 934 (Fla. 1987)). 4 The Fourth District s decision is consistent with Thornber. The decision in Thornber states the presumption is that no change in the common law is intended unless the statute is explicit and clear in that regard. 568 So. 2d at 918. A statute makes its intent to change the common law clear if it unequivocally states that it changes the common law, or is so repugnant to the common law that the two cannot coexist. Id. The Fourth District properly concluded that the liquidated damages remedy allowed at common law is repugnant with the statute that sets out the total universe of choices available to a landlord when a tenant has not completed the term of a lease. (A:3). Second, Olen argues that the Fourth District s decision conflicts with a case 4 The decision in Sand Key Associates does not stand for the cited proposition. Instead, that decision merely examined the language of a statute and concluded that it intended to codify the common law rule. Sand Key Associates, 512 So. 2d at 939. 9

applying the canon of construction expressio unius est exclusio alterius (OJB:8-9) (citing Smalley Transportation Co. v. Moed s Transfer Co., 373 So. 2d 55 (Fla. 1st DCA 1979)). In Smalley, the court held that a statute created a right to bring an action for injunctive relief and left standing the common law right to money damages. 373 So. 2d at 56-57. The decision reasoned that if the statute merely used general words, courts should hesitate to apply the expressio unius canon to determine whether those general words are intended to include other matters besides such as are specifically mentioned. Id. at 57. Unlike the statute in Smalley, section 83.595(1) uses specific language rather than general words. As the Fourth District reasoned, section 83.595(1) sets forth three specific remedies for residential landlords when a tenant breaches by vacating the premises early (A:2-4). The Legislature allowed residential landlords to recover liquidated damages in another context, not applicable here, but excluded this remedy from section 83.595(1) (A:4 n.2). Olen has failed to demonstrate any conflict with these cases, setting forth general principles of statutory construction in very different factual contexts. CONCLUSION There is no conflict. Olen s petition to invoke this Court s discretionary jurisdiction should be denied. 10

JANE KREUSLER-WALSH BARBARA J. COMPIANI REBECCA MERCIER VARGAS of KREUSLER-WALSH, COMPIANI & VARGAS, P.A. 501 South Flagler Drive, Suite 503 West Palm Beach, FL 33401-5913 rmercier@jkwpa.com (561) 659-5455 and THEODORE BABBITT JOSEPH JOHNSON of BABBITT, JOHNSON, OSBORNE & LeCLAINCHE, P.A. 1450 Centrepark Boulevard, Suite 100 West Palm Beach, FL 33401 (561) 684-2500 and ROD TENNYSON of ROD TENNYSON, P.A. 1450 Centrepark Boulevard, Suite 100 West Palm Beach, FL 33401 (561) 478-7600 Counsel for Respondent, Moss By REBECCA MERCIER VARGAS Florida Bar No. 0150037 CERTIFICATE OF SERVICE I CERTIFY that a copy of the foregoing has been furnished by mail this day of September, 2008, to: SHERIDAN K. WEISSENBORN of PAPY, 11

WEISSENBORN, VRASPIR, PATERNO & PUGA, P.A., 3001 Ponce de Leon Boulevard, Suite 214, Coral Gables, FL 33134 (Counsel for Petitioners, Olen). By: REBECCA MERCIER VARGAS Florida Bar No. 0150037 Roman font. CERTIFICATE OF FONT Moss s Brief on Jurisdiction has been typed using the 14-point Times New By: REBECCA MERCIER VARGAS Florida Bar No. 0150037 12