Wilderness Country Club v. GrovesWilderness Country Club v. Groves
Timothy R. Thornton of Rider, Bennett, Egan & Arundel, Minneapolis, Minn., and Karl L. Johnson of Nuckolls & Johnson, Fort Myers, for appellees/cross appellants.
David M. Maloney, Deputy Gen. Counsel, Dept. of Business Regulation, Tallahassee,
OTT, Chief Judge.
This appeal involves a condominium recreational facilities sublease. The trial court declared invalid a rеnt escalation clause therein and rescinded the entire sublease. We affirm.
The following facts bear on the issues before us. In June, 1973, the Frank family leased land to appellant Downing for ninety-nine years (the lease). Shortly thereafter, construction of a golf course and related facilities on the leased premises began. On June 27, 1974, appellant Wilderness Country Club Partnership, Ltd., consisting of appellants Downing, Frye, and Shumway (the partnership), formed Wilderness Country Club, Inc. (the club), to manage and operate the golf course. Membership in the club was limited to owners of condominiums to be constructed on property adjacent to thе golf course. The same day Downing sublet the golf course property to the club for a period of ninety-seven years (the sublease). The original lease from Frank to Downing and the sublease from Downing to the club sрecified that base annual rent would increase at five-year intervals according to changes in a consumer price index.
In July, 1974, Downing assigned his rights as lessee under the Frank lease and as sublessor under the club sublease to the partnership. The partnership completed construction of the golf course and facilities and commenced construction of the adjacent condominiums.
On December 30, 1975, the partnership formed Wilderness Country Club Association, Inc., to manage, operate, and maintain the condominiums and common elements to be known as Wilderness Country Club Condominiums, and to cooperate with the club in the maintenаnce of the golf course facilities. On January 9, 1976, the partnership recorded the first of eleven declarations of condominium for Wilderness Country Club Condominium. The declaration required all condominium unit owners to be members of the association and the club, and the declaration made reference to the sublease. Hence, the association and the club would consist of the same membership.
In 1978, appellеes, owners of Wilderness condominium units, and the association and the club (both now controlled by the condominium unit owners) filed suit against appellants, seeking, inter alia, to have the rent escalation clause declared invalid pursuant to
Appellants now challenge the unenforceability of the rent escalation clause, arguing that
Section 718.401(8)(a), formerly section 711.231, became effective June 4, 1975, specifically prohibiting and declaring void for public policy reasons “the inclusion or enforcement of escalation сlauses in leases or agreements for recreational facilities, land, or other commonly used facilities serving condominiums.” In Fleeman v. Case, 342 So. 2d 815 (Fla. 1977), the court held that the legislature did not intend retroactive application оf this statute, and even if it had, such application would be an unconstitutional impairment of the obligation of contract
Recently, the supreme court approved the application of
The declaration was signed by the developer and the condominium association, the same two parties who signed the lease. The lease was attached to and made a part of the declaration and the lease referred back to the dеclaration. The supreme court held “that the parties intended to be bound by future amendments to the condominium act and as such section 718.401(4) is applicable and enforceable under the facts of the instаnt case.” Angora, 439 So. 2d at 834. The court distinguished Fleeman, finding no language in the Fleeman documents evidencing an intent on the part of the lessor to incorporate the condominium act or its future amendments into the contract.
In the instant case, the declaration submits the property to condominium ownership “pursuant to chapter 711, Florida Statutes, the Condominium Act.” When the declaration was recorded, section 711.231, the anti-escalation clause statute, was a part of the cоndominium act. The recreational facilities sublease refers to the declaration of condominium to be recorded in the future. The declaration refers to the recreational facilities sublease. The declaration obligates unit owners to join the club and requires them to make the payments under the sublease. The same individuals, although in different partnership and corporate capacities, dеveloped the condominium, executed the declaration, and were sublessors and sublessees of the recreational facilities sublease. These documents evidence an intent of these individuals to be bound by the condominium act as it existed when the declaration was recorded. Therefore, as in Angora, application of
We now turn to the issue of rescission of the entire recreational facilities sublease.1
[T]he authorities hold generally that a contract should be treated as entire when, by a consideration of its terms, nature, and purpose, each and all of its parts appear to bе interdependent and common to one another and to the consideration. Stokes v. Baars, 18 Fla. 656; 12 Am.Jur., Contracts, sec. 316. Stated differently, a contract is indivisible where the entire fulfillment of the contract is contemplated by the рarties as the basis of the arrangement. Hyde & Gleises v. Booraem & Co., 16 Pet. 169, 10 L. Ed. 925. On the other hand, a bilateral contract is severable where the illegal portion of the contract does not go to its essence, and where, with the illegal portion eliminated, there still remains of the contract valid legal promises on one side
which are wholly supported by valid legal promises on the other. Williston on Contracts, rev. ed., Vol. 6, sec. 1782. Whether a contrаct is entire or divisible depends upon the intention of the parties. Ireland v. Craggs, 5 Cir., 56 F.2d 785 [(1932)]. And this is a matter which may be determined “by a fair construction of the terms and provisions of the contract itself, and by the subject matter to which it has reference.” 12 Am.Jur., Contracts, sec. 315.
Id. at 821-822. Where one contractual provision is void, the balance of the contract is also void unless the balance fairly reflects the original intent of the parties to the contract. Brooks v. Palm Bay Towers Condo Ass‘n, Inc., 375 So. 2d 348 (Fla. 3d DCA 1979).
Judged by this standard, we think the sublease was nondivisible and therefore appellants were entitled to rescission of the entire recreational facilities sublease. Without rescission, appellants would receive only the base rent, a portion of the rent originally contemplated in the sublease. The benefits granted to appellees under the sublease are nondivisible — the sublease does not assign monetary values to separate rights and privileges enjoyed by appellees under the sublease. Hence, the base rent and the periodic increases pursuant to the escalation clause relate to one object or purpose, the use and enjoyment of all recreational facilities. Cf. Singleton v. Foreman, 435 F.2d 962 (5th Cir. 1970) (where contingent fee portion of attorney fee contract void, retainer not allowеd to stand alone). Generally, the price term in a contract is vital; severing the price term eliminates the essence of the contracting parties’ agreement. Id.
We hasten to emphasize that the еscalation clause in this case was not void at the time the sublease was executed. Therefore, it cannot be said that it was included in the sublease with malicious intent or reprehensible motive. The trial court rejected appellees’ contention that appellants had “unclean hands” and were therefore not entitled to the equitable remedy of rescission. This finding by the trial court is supported by substantial competent evidence.
The appellees, along with the Division of Florida Land Sales and Condominiums as amicus curiae, contend that rescission will chill the exercise of rights afforded to condominium unit owners by
The decision of the trial court is AFFIRMED.
HOBSON and LEHAN, JJ., concur.