116 So. 3d 530
Fla. Dist. Ct. App.2013Background
- Broward County contracted with private paratransit providers (including Handi‑Van and Village Car) under multi‑year contracts that included a 90‑day termination‑for‑convenience clause and $10 special consideration for that right.
- After Florida’s Amendment One (2008) reduced county revenues, commissioners decided to replace an expensive "rider’s choice" paratransit model with a lower‑cost "virtual fleet."
- County negotiated new contracts and awarded service under the virtual‑fleet model to the lowest bidders; Handi‑Van and Village Car submitted higher bids and were not selected.
- County gave all providers 90‑day notice to terminate the existing contracts pursuant to the termination‑for‑convenience provisions; appellants sued claiming breach and other relief.
- Federal courts rejected most federal claims and remanded the breach‑of‑contract claim to Florida state court; the state circuit court granted summary judgment for the County, which the Fourth District affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the County’s termination for convenience was unenforceable because it made the contracts illusory | Termination clause combined with pre‑decision facts meant the County never intended to perform, so clause is illusory and contracts lack mutuality/consideration | Clause was negotiated, contained separate consideration ($10) and required 90 days’ notice — adequate consideration under Florida law | The clause was supported by consideration and not illusory; summary judgment for County affirmed |
| Proper legal standard to test convenience termination: changed circumstances or bad faith | Appellants urged adoption of a changed‑circumstances requirement (Torncello approach) | County argued Florida contract law governs and, even under federal law, bad faith standard applies | Court applied Florida law (and alternatively federal bad‑faith standard) and found no breach; changed‑circumstances rule not adopted |
| Whether County acted in bad faith or with intent to injure by terminating | Appellants contended County decided to terminate prior to contracting and thus acted improperly | County showed decision was motivated by legitimate fiscal reasons (Amendment One) and development of the virtual fleet; appellants knew of potential termination per addendum | No showing of bad faith or intent to injure; summary judgment proper |
| Entitlement to reliance or consequential damages for fleet upgrades | Appellants sought reliance damages spent to comply with contract | County argued remedies were limited to contract terms (payment for services to termination date) and appellants were paid for performed services | Because there was no breach and contract remedies were satisfied, appellants were not entitled to additional reliance damages |
Key Cases Cited
- United States v. Corliss Steam‑Engine Co., 91 U.S. 321 (U.S. 1875) (early recognition of government authority to suspend/terminate contracts in exigent circumstances)
- Colonial Metals Co. v. United States, 494 F.2d 1355 (Ct. Cl. 1974) (permissive view allowing government to terminate to obtain cheaper performance)
- Torncello v. United States, 681 F.2d 756 (Ct. Cl. 1982) (plurality opinion requiring changed circumstances to justify termination‑for‑convenience)
- Salsbury Indus. v. United States, 905 F.2d 1518 (Fed. Cir. 1990) (limiting Torncello and holding bad faith is required where government never intended performance)
- Krygoski Constr. Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996) (reaffirming bad‑faith/abuse‑of‑discretion standard; Torncello narrow)
- Beach Resort Hotel Corp. v. Wieder, 79 So.2d 659 (Fla. 1955) (Florida law: courts will not rewrite contracts or relieve parties of improvident bargains)
- Vila & Son Landscaping Corp. v. Posen Constr., 99 So.3d 563 (Fla. 2d DCA 2012) (applying Florida principles to termination clauses and consideration)