Opinion
No. 88-0106.
March 8, 1989.
Appeal from the Circuit Court, Broward County, Frank A. Orlando, J.
Katherine J. Langley and Robert E. Huebner of Huebner Murray, P.A., Fort Lauderdale, for appellant.
John M. Ross and Bart A. Houston of Houston, Cooper, Shahady, Frazier, P.A., Fort Lauderdale, for appellee.
This appeal concerns which of the parties holds the leasehold interest in the southern ten feet of the now vacated Southeast Fourth Street located in Fort Lauderdale, Florida. Fort Lauderdale Southern Development Corporation (Fort Lauderdale) owns the Holiday Inn situated on the property north of and adjacent to Southeast Fourth Street. Beach Boys Plaza, Inc. (Beach Boys) is the present leasehold owner of the property south of and adjacent to Southeast Fourth Street.
Albert B. Austin and Lucille A. Austin are the fee owners and lessors of the leasehold interest in dispute.
On May 18, 1964, a ninety-nine year agreement was entered into between the Austins and Casa Playa, Inc. leasing the property south of Southeast Fourth Street, exclusive of right of ways. This lease was subsequently assigned in 1964 and 1966.
On April 10, 1968, the lease was modified to provide that upon the vacating of the alley north of the leasehold property (Southeast Fourth Street) by the City of Fort Lauderdale it would become part of the leasehold.
On September 3, 1974, Fort Lauderdale became the assignee of the lease agreement.
On April 30, 1975, Fort Lauderdale entered into an Option Agreement with Varuna, Inc., Beach Boys' predecessor in title, to assign the lease and acknowledge that Southeast Fourth Street eventually would be vacated and when it was it would remain the property of Fort Lauderdale.
On November 26, 1975, Varuna, Inc. exercised its option and Fort Lauderdale assigned the lease.
On December 9, 1975, Varuna, Inc. assigned its interest in Southeast Fourth Street to Fort Lauderdale. This assignment was duly recorded the next day.
Several more assignments of the lease occurred prior to October 9, 1984, when Beach Boys became the assignee.
On November 20, 1984, the City of Fort Lauderdale enacted an ordinance which vacated, abandoned, and closed Southeast Fourth Street.
This dispute arose when Beach Boys commenced construction work on Southeast Fourth Street. Fort Lauderdale was initially successful in obtaining a temporary injunction against Beach Boys' use of Southeast Fourth Street. At the final hearing, the trial judge dissolved the temporary injunction ruling that the agreement between Fort Lauderdale and Varuna, Inc., was personal in nature and not a covenant which ran with the land.
We believe the trial judge erred in failing to find the agreement between Fort Lauderdale and Varuna, Inc. to be an assignment of a future interest in land, duly recorded and binding upon any successor in title.
The written assignment (which is found to have been sufficiently argued below) was a valid transfer of an uncertain future interest in property, properly executed by the parties for valuable consideration, delivered and accepted. § 689.01, Fla. Stat. (1987); Richardson v. Holman, 160 Fla. 65, 33 So.2d 641 (1948).
Beach Boys can have no greater property rights than the property rights of its lessor. The recorded assignment is notice to all subsequent assignees, including Beach Boys.
Much is made of the legal differences between a covenant and an assignment in order to support the lower court's finding that only a promise to convey in the future was created by the Option Agreement binding only Fort Lauderdale and Varuna, Inc. To adopt that position leads to the conclusion that the Austin modification concerning the same future act would be binding only on them and the then lessors, which is espoused by no one.
Accordingly, the judgment appealed from is REVERSED and the cause is REMANDED to the trial court for further proceedings consistent herewith.
GARRETT, J., and KAHN, MARTIN D., Associate Judge, concur.
GLICKSTEIN, J., dissents with opinion.
The longer I am here, the more concerned I become as to whether we appellate judges give lip service or real service to the basic principles of appellate review that require us to view the trial court's judgment with a presumption of validity, and to affirm if the pleadings and evidence support the judgment under any theory or principle of law. See Applegate v. Barnett Bank of Tallahassee, 377 So.2d 1150 (Fla. 1979).
I perceive the present case to be one requiring application of these principles, particularly in light of appellant's failure to give the trial court the opportunity to act directly and expressly upon what appellant argues here for the first time. Specifically, I am of the opinion that appellant should be precluded from arguing that the law relating to covenants is inapplicable to the instant case as my review of the record discloses that appellant did not make this argument at the trial level, thus depriving the trial court of an opportunity to consider it.
Appellant Fort Lauderdale Southern Development Corporation owns the Holiday Inn located north of the vacated right-of-way. Appellee Beach Boys Plaza, Inc. is the current lessee of the property south of the right-of-way. Only the southern ten feet of the right-of-way is in dispute between these parties, both of which claim ownership of the leasehold interest thereon.
On the merits, Beach Boys points out that the law of covenants does apply to the facts of the instant case because the December 9, 1975, document executed between appellant and Varuna, Inc., constituted an agreement to perform a future act involving real estate. Beach Boys cites to various definitions of the term "covenant" which support its position that said term relates principally to promises to do or to not do certain specified acts contained within instruments pertaining to real estate. Paragraph two of the December 1975 agreement contains the covenant that "[u]pon the vacating of Southeast Fourth Street by the proper governmental authorities, Varuna agrees to execute all necessary documents to transfer its interest in Southeast Fourth Street to FORT LAUDERDALE." In further support of its position that the trial court properly relied on the law of covenants, Beach Boys notes that the option agreement, dated April 30, 1975, entered into by appellant and Varuna, Inc., provides that the parties promised that at some point in the future, they would
Enter into such agreements as may be necessary to convey to FLS [Fort Lauderdale Southern Development Corporation] any interest which Varuna has or may acquire in the property underlying said South East Fourth Street. In the event such conveyance takes place subsequent to the closing contemplated hereunder, such property underlying South East Fourth Street shall be conveyed by Varuna to FLS without payment of any further consideration by FLS to Varuna and free and clear from any and all mortgages.
In light of the existence of the agreements between Varuna, Inc., and appellant promising the performance of specified acts relating to the subject real estate, Beach Boys claims that the trial court's application of principles of law relating to covenants was correct.
In order to determine whether the December 9, 1975 agreement between appellant and Varuna, Inc., is in fact a covenant (a promise to do something in the future) or merely a present assignment of existing rights, the entire agreement was read and construed. The agreement reads as follows:
THIS AGREEMENT made and entered into this 9th day of December, 1975, between FORT LAUDERDALE SOUTHERN DEVELOPMENT CORP., an Ohio corporation authorized to do business in the State of Florida, hereinafter called "Fort Lauderdale", and VARUNA, INC., a Florida corporation, hereinafter called "Varuna".
WITNESSETH:
WHEREAS, Fort Lauderdale owns an interest in certain real property adjoining Southeast Fourth Street, bounded on the East by Atlantic Boulevard and on the West by Seabreeze Boulevard, in Fort Lauderdale, Florida, and
WHEREAS, Varuna owns an interest in certain real property adjoining Southeast Fourth Street, bounded on the East by Atlantic Boulevard and on the West by Seabreeze Boulevard, in Fort Lauderdale, Florida, as described in Exhibit "A",
WHEREAS, upon the vacating of Southeast Fourth Street by the proper governmental authorities, Varuna agrees that all its interest in the said Southeast Fourth Street belongs to Fort Lauderdale.
NOW THEREFORE, in consideration of the premises and in consideration of Ten Dollars ($10.00) and other valuable consideration, receipt of which by each is hereby acknowledged, the parties do hereby agree as follows:
1. Varuna does hereby assign, transfer and set over unto Fort Lauderdale all of its right, title and interest in Southeast Fourth Street as is bounded on the East by Atlantic Boulevard and on the West by Seabreeze Boulevard in Fort Lauderdale, Florida.
2. Upon the vacating of Southeast Fourth Street by the proper governmental authorities, Varuna agrees to execute all necessary documents to transfer its interest in Southeast Fourth Street to Fort Lauderdale.
3. Fort Lauderdale hereby accepts all the interest of Varuna in Southeast Fourth Street, bounded on the East by Atlantic Boulevard and on the West by Seabreeze Boulevard, in Fort Lauderdale, Florida.
(Emphasis added).
The third "WHEREAS" clause of the agreement clearly provides that upon the vacating of the alleyway by the governmental authorities, Varuna agreed that all of its interest in said alleyway would belong to appellant. The language "upon the vacating," as I read it, implies that upon the occurrence of this future event, then Varuna's interest would belong to appellant. Paragraph two of the agreement can be read in a manner consistent with this interpretation. It provides that once the anticipated vacating of the alleyway occurred, then Varuna would execute all documents necessary to transfer its interest in the alleyway to appellant. In my opinion, the most reasonable interpretation of the agreement is that Varuna promised to do something in the future and only upon the occurrence of the anticipated event, i.e., the vacating of the alleyway by the governmental authorities, and therefore, the agreement is in fact a covenant.
The option agreement entered into by Varuna and appellant on April 30, 1975, further supports this interpretation of the agreement. Paragraph six of the option agreement provides that:
The parties contemplate that South East Fourth Street which borders the property subject to the Austin Lease on the north will be vacated either before or after the closing contemplated by this Agreement. Whether said vacation takes place prior to or subsequent to the closing, the parties agree that the vacated property shall remain the property of FLS and shall not become or remain the property of Varuna. The parties agree to enter into such agreements as may be necessary to convey to FLS any interest which Varuna has or may acquire in the property underlying said South East Fourth Street. In the event such conveyance takes place subsequent to the closing contemplated hereunder, such property underlying South East Fourth Street shall be conveyed by Varuna to FLS without payment of any further consideration by FLS to Varuna and free and clear from any and all mortgages.
(Emphasis added). My reading of the option agreement leads me to hold the trial court could properly conclude that the parties anticipated the government vacating its use of the alleyway; and that they wanted to formalize the action they would take in the future, if and when such event occurred. The trial court could reasonably have been persuaded by Beach Boys' characterization of the December 9, 1975 agreement as a covenant rather than as an assignment of a presently-held leasehold interest.
I would affirm the trial court's judgment.