Belcher v. KierBelcher v. Kier
John T. Allen, Jr., and Christopher P. Jayson of John T. Allen, Jr., P.A., St. Petersburg, for appellees.
Jack M. Skelding, Jr., and David D. Eastman of Parker, Skelding, Labasky and Corry, Tallahassee, for amicus curiae Florida Manufactured Housing Ass‘n, Inc.
Lee Jay Colling and Thomas Presnell, Jr., of Lee Jay Colling & Associates, P.A., Orlando, for amicus curiae Federation of Mobile Home Owners of Florida, Inc.
PER CURIAM.
The appellees, mobile home park tenants, brought a suit for declaratory judgment against the appellant, the park owner, alleging that rental increases for the years 1982 through 1988 were unconscionable and requesting relief pursuant to the Florida Mobile Home Act, chapter 723, Florida Statutes (1986). The trial court found that the increases were unconscionable and ordered the rental increases reduced. We reverse.
Because the determination of unconscionability is a matter of law, Garrett v. Janiewski, 480 So.2d 1324 (Fla. 4th DCA 1985), we view the evidence from the same vantage point as the trial court. In determining the “chameleon-like” nature of unconscionability, Steinhardt v. Rudolph, 422 So.2d 884, 890 (Fla. 3d DCA 1982), several courts have discussed the applicable law, including this court, B.J. Pearce v. Doral Mobile Home Villas, Inc., 521 So.2d 282 (Fla. 2d DCA 1988); see also, Colonial Acres v. Wallach, 558 So.2d 25 (Fla. 3d DCA 1989) (Ferguson, J., dissenting); Ashling Enterprises, Inc. v. Browning, 487 So.2d 56 (Fla. 3d DCA 1986); Garrett, 480 So.2d at 1326; Aristek Communities, Inc. v. Fuller, 453 So.2d 547 (Fla. 4th DCA 1984). These cases make clear that the court must view unconscionability in a two-pronged approach, i.e., procedural unconscionability and substantive unconscionability. The trial court found for the appellees on both aspects of unconscionability. We reverse because, while we agree with the trial court‘s determination of procedural unconscionability, we disagree with its conclusion that the rental increases were grossly excessive, and thereby substantively unconscionable. Thus, because the appellees were unable to carry their burden as to both prongs, the ruling in their favor cannot stand.
These are the facts as found by the trial court, and not disputed here. In 1978 the
After reaching full occupancy, (approximately 478 lots), in 1984 the appellant placed a 4.2 million dollar, interest only, shared appreciation, balloon mortgage on the park. The funds received from this loan were withdrawn by the appellant and were not utilized for repairs, renovation, development, or improvement of the park. Significantly, the court made no factual finding that the services or amenities of the park have been reduced; but we also note that there were no major capital improvements, renovations, or additions to the park since its completion. The rents under review here were charged by the appellant for lots in a mobile home park which all parties acknowledge is a, if not the, premier mobile home park in Pasco County. The rental charges, the highest in Pasco County, varied within the park depending upon the situation of each lot, i.e., whether it was an inside, corner, small waterfront, or large waterfront lot.
Starting in 1982 the rent for the basic inside lot (the category containing the vast majority of lots) increased annually, from $114 per month to $197 per month in 1988.3 These rents were substantially in excess of increases in the Consumer Price Index.4 Each year the appellant unilaterally implemented these rental increases without giving the appellees an opportunity to bargain with him about the size of the increase. The order recites that this was the case for all residents regardless of age, education, intelligence, financial position, or business acumen. The appellees had no choice but to pay the rental increases or bear the burden of attempting to relocate their mobile home or sell the home with the possibility of a large loss. This was the situation which gave rise to the appellees’ claims of procedural and substantive unconscionability.
In March of 1986, the appellees, 241 of the park‘s tenants/mobile home owners, filed a complaint alleging the rents charged were unconscionable under
1982 — $114 1983 — $125 1984 — $137 1985 — $147 1986 — $159 1987 — $165 1988 — $170
The court found that there was procedural unconscionability because of the absence of any meaningful choice on the part of the appellees, citing Kohl v. Bay Colony Club Condominium, Inc., 398 So.2d 865 (Fla. 4th DCA), petition for review denied, 408 So.2d 1094 (Fla. 1981). We affirm this initial finding because of the evidence amply supporting it and because the trial court properly applied the correct law to the facts as found. Of course, had the trial court not found procedural unconscionability, there would have been no need to inquire further. If the appellees, indeed, truly had had an opportunity to bargain on an equal footing with the park owner about the size of the yearly increase, they would not now be heard to complain of the bargain they freely entered into.
Mobile home park tenancy presents a situation where mobile home owners, who generally own their residence which is usually of considerable size and misnamed “mobile,” must lease the land upon which to place this structure. Because of the difficulties inherent in moving the home from one settled location to another, Pearce, 521 So.2d at 284, it is hard to imagine a situation where the park owner and the tenants are in an equal bargaining position on rent increases. The legislature, cognizant of widespread abuses against mobile home park tenants, sought to redress this resulting imbalance by giving the park tenants an avenue to the courts to remedy what the tenants perceived as unconscionable rental charges. Department of Business Regulation v. National Manufactured Hous. Fed‘n, Inc., 370 So.2d 1132 (Fla. 1979); Palm Beach Mobile Homes, Inc. v. Strong, 300 So.2d 881 (Fla. 1974). In adopting the Florida Mobile Home Act, the legislature stopped short of implementing strict rent-control in this setting. Nevertheless, park tenants can usually make, as did the appellees here, the necessary showing of procedural unconscionability for the court to consider next the merits of their substantive unconscionability claim.
After finding the necessary first prong of procedural unconscionability, the trial court then found that there was also substantive unconscionability, a finding which we set out in full below:
c. The facts set out above establish substantive unconscionability because of the outrageous degree of unfairness. Kohl, supra, Steinhardt, supra. It is clear to the Court that the park owner has overreached the park residents and has gained an unjust and undeserved advantage which it would be inequitable to enforce, Peacock Hotel, Inc. v. Shipman, 103 Fla. 633, 138 So. 44, 46 (Fla. 1931), because:
(1) The lot rental increases are not based on a legitimate financial basis for calculating rental values, but are arbitrary and capricious in that they were driven by the consequences of the [appellant‘s] refinancing. Moreover, the increases are confiscatory in nature because they have reduced the value of the mobile home owner‘s property. B.J. Pearce v. Doral Mobile Home Villas, Inc., 521 So.2d 282 (Fla. 2d DCA 1988); Appel v. Scott, 479 So.2d 800 (Fla. 2d DCA 1985); Offner v. Keller Park Investors, I, Ltd., 19 Fla. Supp.2d 140 (Fla. 6th Cir.Ct. 1986); Fredricks v. Hofmann, 45 Fla. Supp. 44 (Fla. 12th Cir.Ct. 1970) aff‘d 354 So.2d 992 (Fla. 2d DCA 1978);
Section 723.031(5), Florida Statutes (1987) .
(2) The increased lot rental amount is significantly higher than the fair market rental value of the lots in Club Wildwood Mobile Home Village. Aristek Communities, Inc. v. Fuller, 453 So.2d 547 (Fla. 4th DCA 1984); State v. DeAnza, 416 So.2d 1173 (Fla. 5th DCA 1982). (3) The lot rent grossly exceeds that paid for lots of equal value in comparable parks. Ashling Enterprises v. Browning, 487 So.2d 56 (Fla. 3d DCA 1986), DeAnza, supra.
d. The rents imposed for the year 1982 have not been shown to be unconscionable.
The court thereafter set the rents at a level matching its previous findings of fair market rental value. The court also ordered that all the overpayments resulting from the rents actually paid from 1983 through 1988 should be credited to future rents until all the overpayment credits were exhausted. Because of our reversal, we do not reach the merits of the issue of the propriety of this remedy for overpayments.5
On appeal, the appellant contends that (1) the court erred as a matter of law in finding the rentals substantively unconscionable because the differences between the rents actually charged and the court‘s findings of fair market value are not so shocking to the conscience per se and (2) that the court refused to consider comparable parks in northern Pinellas County. The appellant claims that this latter issue constituted an abuse of the court‘s discretion because this industry works within a regional market and the appellant‘s park is within a regional market comprised of Pasco and northern Pinellas Counties. If the trial court had compared the rents charged by the appellant in this broader market, the appellant‘s argument continues, it would have found that any disparity in rents was even less shocking to the judicial conscience than was found in reviewing the more limited market of western Pasco County alone.6
The appellees, on the other hand, contend that the court was correct in basing its finding of substantive unconscionability on the “lack of reasonable financial basis” and “the consequences of the debt burden” because the Florida Mobile Home Act seeks to redress “unreasonable” rental charges, not merely those denominated “unconscionable” as evidenced by the use of the former term in various places throughout the Act. See, e.g.,
As we said at the outset, we view the evidence from the same vantage point as the trial court to determine whether the court‘s conclusion in this case is correct. This is because the determination of conscionability is a matter of law.
As far back as 1889 an unconscionable bargain or contract was defined as one that “no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other.” Hume v. United States, 132 U.S. 406, 10 S.Ct. 134, 33 L.Ed. 393 (1889). That standard has not changed. B.J. Pearce v. Doral Mobile Home Villas, Inc., 521 So.2d 282 (Fla. 2d DCA 1988) (citing Appel v. Scott, 479 So.2d 800 (Fla. 2d DCA 1985), for the proposition that allegation of “grossly excessive” when compared with rents charged by similarly situated mobile home parks in county is sufficient to withstand motion to dismiss); Garrett, 480 So.2d at 1326 (unconscionable synonymous with “shocking to the conscience” and “monstrously harsh“); Bennett v. Behring Corp., 466 F. Supp. 689 (S.D.Fla. 1979) (citing Hume). The term “unconscionable” has a long history in our common law. Department of Business Regulation v. National Manufactured Hous. Fed‘n, Inc., 370 So.2d 1132 (Fla. 1979) (finding rent control legislation unconstitutional because commission delegated too much legislative authority without enough meaningful guidelines as to legislative intent regarding what unconscionability is; commission needs such guidelines because, unlike the judiciary, it has not had the term developed through long common law history). If “unconscionable” is to be synonymous with “unreasonable,” the legislature must clearly so state, not this court.
We are further convinced that the legislature knows how to distinguish between these two terms when it so chooses and that it has distinguished them in the relevant statutes here. Historically, chapter 723 contained the word “unconscionable” in section 723.033 in all its former versions. Indeed, this section has had no material change since its inception in Chapter 76-81, Laws of Florida, originally numbered in our statutes as section 83.754. Since then the legislature has amended the sections dealing with mobile home park owners and tenants almost annually. In a substantial reworking of the statutes in 1984, all the relevant sections were placed into a separate chapter, now chapter 723. Many new procedures were instituted including mediation or arbitration. Within chapter 723, there are several sections which do include the term “unreasonable.” For example,
Keeping in mind then that the standard we are applying is one of unconscionability, rather than one of unreasonableness, we review the rents as actually charged to see if they are monstrously harsh or grossly excessive, Garrett, when compared to the trial court‘s finding of fair market rental value.9 In comparing these two amounts, we find that the difference between them ranged from a low of $9 per month in 1984 (6.6% above fair market rental value) to a high of $27 per month in 1988 (15.9% above fair market rental value). We cannot say that “no man in his right mind” would pay these rents, especially in view of the fact that during the years under review approximately 100 tenants (including several appellees) moved into the park and voluntarily chose to pay these charges that the trial court found unconscionable.10 The rental increases here are in the same range as those in Garrett. In Garrett, the rents were found to be $15 above fair market rental value for the two years under review there, differences of 11.54% and 13.64% above fair market rental value.11 The appellate court in Garrett did not find such increases substantively unconscionable. Inasmuch as we align ourselves with the Fourth District Court of Appeal in Garrett regarding the “grossly excessive” standard of substantive unconscionability, we reach a like conclusion and hold that the rental increases in this case were not substantively unconscionable.
Reversed and remanded for entry of judgment for the appellant.
DANAHY, A.C.J., and FRANK and THREADGILL, JJ., concur.
Notes
1982 — $114 1983 — $134 (17.5%) 1984 — $146 (8.9%) 1985 — $168 (15.0%) 1986 — $181 (8.3%) 1987 — $189 (4.4%) 1988 — $197 (4.2%)
(1) If the court, as a matter of law, finds a mobile home lot rental agreement, or any provision of the rental agreement, to have been unconscionable at the time it was made, the court may:
(a) Refuse to enforce the rental agreement.
(b) Enforce the remainder of the rental agreement without the unconscionable provision.
(c) Limit the application of the unconscionable provision so as to avoid any unconscionable result.
(2) When it is claimed or appears to the court that the rental agreement, or any provision thereof, may be unconscionable, the parties shall be afforded a reasonable opportunity to present evidence as to its meaning and purpose, the relationship of the parties, and other relevant factors to aid the court in making the determination.
(7)... .
This subsection shall not preclude the finding that a lot rental increase is invalid on other grounds and shall not be construed to limit any rights of a mobile home owner or to preclude a mobile home owner from seeking any remedies allowed by this chapter, including a determination that the lot rental agreement or any part thereof is unreasonable or unconscionable. [Emphasis added.]