Sears, Roebuck & Co. v. Forbes/Cohen Florida Properties, L.P.
223 So. 3d 292
Fla. Dist. Ct. App.2017Background
- Forbes/Cohen (landlord) leased mall property and entered a reciprocal easement agreement (R.E.A.) and a P.U.D. requiring architectural/signage review for anchor tenants.
- Sears held a 1987 sublease as an anchor with an express contractual "right to sublet" subject to the R.E.A.; Sears also reserved the right to contest applicability of laws/ordinances.
- In 2012, Forbes (without Sears’ knowledge) urged the City of Palm Beach Gardens to adopt Resolution 20-2012, requiring City Council approval (and mall-owner approval) for any subdivision of anchor space that would require separate business licensing.
- Sears negotiated a sublease with Dick’s Sporting Goods for one floor and sued when Forbes refused consent and the City relied on the Resolution to assert approval authority.
- The trial court entered a bare "defendant wins" judgment without findings; the Fourth DCA reviewed de novo and found the Resolution (1) impermissibly impaired Sears’s contract rights, (2) violated substantive due process by granting unbridled discretion, and (3) awarded Sears prevailing-party status under 42 U.S.C. §§ 1983 and 1988 for attorney’s fees; it also held Sears had a contractual right to sublease without Forbes’ prior approval for a one-floor sublease.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the City Resolution unconstitutionally impairs Sears’s contract rights | Resolution diminishes Sears’s contractual right to sublease by adding City/owner approval conditions | Resolution merely clarifies P.U.D. and regulates subdivision (not sublease) for aesthetic/administrative purposes | Held: Resolution impairs Sears’s contract; unconstitutional—no sufficient public purpose and gives unbridled discretion |
| Whether the Resolution violates substantive due process by lacking standards | Resolution vests City and mall owner with unfettered discretion to approve/subdivide anchor space, enabling arbitrary deprivation | Resolution serves legitimate rational basis (preserve mall aesthetics, health/safety) and is administrative, not legislative | Held: Violates substantive due process because it contains no objective standards and permits arbitrary decisions |
| Whether Sears is a prevailing party under 42 U.S.C. §§ 1983 & 1988 and eligible for attorneys’ fees | Declaratory relief alters legal relationship; thus Sears prevailed and may recover fees | Any victory is nominal and Farrar limits fee recovery where relief is minor | Held: Sears is a prevailing party entitled to fees; declaratory relief/injunction satisfy prevailing-party test |
| Whether Sears has a contractual right to sublease without Forbes’s approval (and related signage rights) | Sublease and R.E.A. expressly permit assignment/subletting and leasing portions; signage criteria do not bar sublessee signs; renewal right unaffected | Forbes argues sublease/R.E.A. restrict subleasing/signage, renewal right may be limited by sublease | Held: Sears has the contractual right to sublease one floor without Forbes’ approval; Sears can transfer signage rights it possesses; nothing in sublease bars lease extension if not in material default |
Key Cases Cited
- Chiles v. United Faculty of Fla., 615 So.2d 671 (Fla. 1993) (Florida Constitution strongly protects contract rights)
- In re Advisory Opinion to the Governor, 509 So.2d 292 (Fla. 1987) (legislation that retroactively destroys contractual expectations is prohibited)
- Pomponio v. Claridge of Pompano Condo., Inc., 378 So.2d 774 (Fla. 1979) (Florida may afford greater Contract Clause protection than federal courts)
- Searcy, Denney, Scarola, Barnhart & Shipley v. State, 209 So.3d 1181 (Fla. 2017) (analysis of tolerable impairment and public-purpose balancing)
- N. Bay Vill. v. Blackwell, 88 So.2d 524 (Fla. 1956) (ordinance delegating unfettered discretion without standards is unconstitutional)
- Drexel v. City of Miami Beach, 64 So.2d 317 (Fla. 1953) (zoning/permit standardless delegations violate due process)
- City of Miami Beach v. Fleetwood Hotel, Inc., 261 So.2d 801 (Fla. 1972) (ordinance void where it grants unbridled enforcement discretion without objective standards)
- U.S. Fidelity & Guaranty Co. v. Dep’t of Ins., 453 So.2d 1355 (Fla. 1984) (substantial impairment need not be total to violate Contract Clause)
- Monell v. Dep’t of Social Servs., 436 U.S. 658 (U.S. 1978) (municipal liability under § 1983 for official policies)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (standards for awarding reasonable attorney’s fees)
- Lefemine v. Wideman, 568 U.S. 1 (U.S. 2012) (declaratory or injunctive relief can satisfy prevailing-party requirement under § 1988)