Motion-Secondary: UP FIELDGATE US INVESTMENTS EAST COLONIAL LLC vs. DICKS SPORTING GOODS INC

On May 10, 2017 a Motion-Secondary was filed involving a dispute between Up Fieldgate Us Investments East Colonial Llc, and Dicks Sporting Goods Inc, for 3 in the District Court of Orange County.

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Filing # 63028755 E-Filed 10/18/2017 10:06:08 PM

IN THE CIRCUIT COURT OF THE NINTH JUDICIAL CIRCUIT
IN AND FOR ORANGE COUNTY, FLORIDA

UP FIELDGATE US INVESTMENTS
– EAST COLONIAL, LLC

Plaintiff,

v. Case No.: 2017-CA-004308-O
Complex Business Court
DICK’S SPORTING GOODS, INC.,
a Delaware Corporation

Defendant.

RESPONSE IN OPPOSITION TO MOTION TO DISMISS

COMES NOW Plaintiff, UP FIELDGATE US INVESTMENTS – EAST

COLONIAL, LLC (“Landlord”), by and through its undersigned attorney, and files

its Response in Opposition to Defendant, DICK’S SPORTING GOODS, INC.’s

(“Dicks” or “Tenant”) Motion to Dismiss (“Motion”), and states as follows:

I. SUMMARY OF ARGUMENT

Dicks is a successful, nationwide retailer occupying a massive outparcel

(“Premises”) in a Shopping Center in front of Fashion Square Mall in Orlando,

Florida (“Mall”). Landlord owns the Shopping Center, but does not own the Mall.

The Mall is wholly unrelated to Dicks. Dicks is not a Mall tenant and Landlord does

not have any control over the Mall. The Premises is located on the main roadway

and Dicks enjoys great success at the Premises. Indeed, its sales at this location

4817-1693-7548.2
51542/0004 lcorona LC
exceed its own nationwide average and increase each month.

Despite Dicks’ success, Dicks invokes an unconscionable penalty on Landlord

based on the unrelated Mall’s tenants, and refuses to pay its full rent. But, Dicks has

not suffered any loss due to the Mall’s tenants and it knew itwould not suffer any

loss. By invoking the penalty, Dicks owes Landlord at least $276,409.67, as of

August 2017, despite Dicks not suffering any loss. This amount continues to grow

rapidly. Dicks is also required to pay Common Area Maintenance payments

(“CAM”) of $6,250.00, monthly, and annual tax payments of $119,379.84. Am.

Compl., ¶¶ 61-63.

Landlord seeks a declaration from the Court that Dicks is in default; the

penalty provision is unenforceable, or in the alternative, that Landlord is permitted

to terminate the lease; and that Dicks is being unjustly enriched.

II. FACTUAL BACKGROUND

The Parties entered into a Lease for the Premises on May 14, 2014 (“Lease”),

which is attached as Exhibit 1 to the Amended Complaint. Although Section 1.7 of

the Lease discusses an “Ongoing Co-Tenancy Requirement,” that label is a

misnomer because Section 1.7 relates to tenants of the Mall, and Dicks is not a “co-

tenant” of the Mall. Still, the Lease defines the “Ongoing Co-Tenancy Requirement”

to mean at least 80% of the Mall to be operated by a national retailer or a regional

retailer satisfactory to Dicks. Lease, § 1.7(a).

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If there is an “Ongoing Co-Tenancy Violation,” Landlord is penalized, even

though it has no control over the Mall’s tenancy, and may only be paid “two-percent

of Gross Sales (as defined in Section 6.2), but never more than the Minimum Rent.”

(“Substitute Rent”). Lease, § 1.5(c)(i). Section 1.7 provides that if the

III. LEGAL STANDARD

A motion to dismiss for failure to state a cause of action merely tests the

sufficiency of the complaint and does not decide the merits of the case. See Johnson

v. Gulf County, 965 So. 2d 298, 299 (Fla. 1st DCA 2007) (finding a complaint is

“not subject to dismissal for failure to state a cause of action ‘unless the movant can

establish beyond any doubt that the claimant could prove no set of facts whatever in

support of his claim.’”) (quoting Ingalsbe v. Stewart Agency, Inc., 869 So. 2d 30, 35

(Fla. 4th DCA 2004)); see also Bond v. Koscot Interplanetary, Inc., 246 So. 2d 631,

633 (Fla. 4th DCA 1971) (“If a complaint states a cause of action upon any ground,

a motion to dismiss the complaint for failure to state a cause of action should be

denied.”).

Pursuant to Rule 1.110, Florida Rules of Civil Procedure, a complaint need

only set forth “a short and plain statement of the ultimate facts showing that the

pleader is entitled to relief, and a demand for judgment for the relief sought by the

pleader.”

In its review of the Motion, the allegations of the Complaint must be taken as

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true, without regard to Plaintiff’s ability to prove them. See Coriat v. Global

Assurance Group, Inc., 862 So. 2d 743 (Fla. 3rd DCA 2003); see also Wallace v.

Dean, 3 So. 3d 1035, 1042 (Fla. 2009) (finding that a court must accept all

reasonable inferences in the light most favorable to a plaintiff).

Finally, “[m]otions to dismiss are not favored methods of terminating

litigation.” Board of County Comm’rs v. Aetna Casualty & Surety Co., 604 So. 2d

850, 851 (Fla. 2d DCA 1992).

IV. LEGAL ARGUMENT

The Complaint is properly and sufficiently states its causes of action for the

reasons set forth below.

A. Landlord has Properly Alleged an Action for Declaratory Judgment

In short, Landlord seeks a declaration that Dicks is in default and that the

Ongoing Co-Tenancy Requirement and Substitute Rent constitute an unlawful,

unconscionable penalty or unlawful liquidated damages, or, in the alternative, that

Landlord has the mutual remedy to terminate the Lease.

To be entitled to a declaratory judgment, “the dispute must be justiciable in

the sense that it is based upon some definite and concrete assertions of right, the

contest thereof involving the legal or equitable relations of parties having adverse

interests with respect to which the declaration is sought.” Colby v. Colby, 120 So.2d

797, 799 (Fla. 2d DCA 1960).

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Landlord has clearly and properly pled its claim for declaratory judgment.

Landlord asserts it has a right to be paid full rent under the Lease. Am. Compl., ¶ 80.

Dicks believes it is entitled to pay Substitute Rent. Am. Compl, ¶ 79. Dicks has been

paying only Substitute Rent, relying on the Ongoing Co-Tenancy Requirement, thus

a present controversy exists. Am. Compl., ¶ ¶ 49, 50. Landlord has an actual, present,

and practical need for a declaration because it is not being paid the full Rent it is

rightfully owed. Am. Compl., ¶¶ 55-61.

i. Landlord has properly alleged that the Ongoing Co-Tenancy
and Substitute Rent Provisions are a Unconscionable
Penalty.

Whether or not a Lease term is unconscionable is a fact-intensive inquiry, and

Landlord has a right to seek discovery and present the Court with evidence of such

prior to consideration of dismissal. See Royal Palm Beach Colony, Inc. v. Greenway

Vill. S. Associations No. 1, 2, 3, & 4, Inc., 443 So. 2d 1034, 1035 (Fla. 4th DCA

1983) (unconscionability and unenforceability must be proven before the complaint

is dismissed).

In order to maintain a claim of unconscionability, a plaintiff must allege that

the practice is both procedurally and substantively unconscionable. See, e.g.,

Powertel, Inc. v. Bexley, 743 So.2d 570, 574 (Fla. 1st DCA 1999); Kohl v. Bay

Colony Club Condo., Inc., 398 So.2d 865, 867 (Fla. 4th DCA 1981). Procedural

unconscionability concerns the relative bargaining power of the parties and the

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manner in which the contract is entered, whereas substantive unconscionability

looks to whether the actual contractual terms are unreasonable and unfair. Romano

v. Manor Care, Inc., 861 So.2d 59, 62 (Fla. 4th DCA 2003).

The amount of procedural and substantive unconscionability may vary and

they “need not be present in the same degree . . . In other words, the more

substantively oppressive the contract term, the less evidence of procedural

unconscionability is required to come to the conclusion that the term is

unenforceable, and vice versa.” Romano, 861 So.2d at 62 (citations omitted).

Landlord alleges both procedural and substantive unconscionability.

a. Landlord has alleged procedural unconscionability.

Landlord has alleged procedural unconscionability by addressing the relative

bargaining power of the parties and the manner in which the Lease was entered into.

Id. (procedural unconscionability concerns the relative bargaining power of the

parties); Am. Compl., ¶¶ 10, 25, 34, 45, 46. In its Motion, Dicks attempts to

improperly inject presumptions and allegations regarding Landlord’s

“sophistication,” its history, and ownership, all of which are far outside the four

corners of the Amended Complaint. For purposes of evaluating the Motion to

Dismiss, Landlord’s factual allegations that Dicks had supreme bargaining power

and presented the Ongoing Co-Tenancy Requirement and Substitute Rent provisions

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on a take-it-or-leave-it basis with no negotiation, must be taken as true. See, e.g.,

Coriat, 862 So. 2d 743 (Fla. 3rd DCA 2003).

Dicks also erroneously relies on case law that is inapplicable when deciding a

motion to dismiss, as here. In Premier Real Estate Holdings, LLC v. Butch, 24 So.

3d 708 (Fla. 4th DCA 2009), the court reviewed the record evidence in the case

before finding no procedural unconscionability. The case was not decided on a

motion to dismiss. As in Butch, Landlord has properly alleged, and must be provided

an opportunity to prove through record evidence, that procedural unconscionability

existed. Further, the Buyer in Butch agreed that the disputed provision “could have

been deleted or modified.” Id. at 711. Landlord has alleged that the disputed

provisions could not have been altered or modified, and instead were on a “take it or

leave it” basis. Am. Comp., ¶¶ 10, 25, 34, 38, 39, 45, 46. Similarly, evidence and

testimony was taken in the other cases cited by Dicks, and they were not decided on

a motion to dismiss.

Further, the cases Dicks relies on belie its erroneous claim that a lack of

opportunity to review the terms of the deal is the only way procedural

unconscionability can be shown. Instead, Dicks’ cases make it clear that procedural

unconscionability can be shown in a number of ways. See, e.g., Fonte, 903 So. 2d

1019, 1025 (Fla. 4th DCA 2005) (“procedural unconscionability, i.e., the relative

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bargaining power of the parties, the manner in which the contract was entered, and

the ability of [plaintiff] to know and understand the challenged contractual terms.”).

Dicks relies on Shedden and Allied Van Lines, but those courts found that one

cannot argue procedural unconscionability by only claiming that it did not read the

agreement. See Jonathan M. Frantz, M.D., P.A. v. Shedden, 974 So. 2d 1193, 1197

(Fla. 2d DCA 2008); Allied Van Lines, Inc. v. Bratton, 351 So. 2d 344, 348 (Fla.

1977) (“No party to a written contract in this state can defend against its enforcement

on the sole ground that he signed it without reading it.”). In fact, Shedden

acknowledged that “[t]he trial court must consider the totality of the circumstances

when determining whether there was procedural unconscionability.” Shedden, 974

So. 2d 1193, 1197 (emphasis supplied).

The cases Dicks relies on held that procedural unconscionability can be shown

through evidence of unequal bargaining power, pressure tactics, and other factors.

VoiceStream Wireless Corp. v. U.S. Communications, Inc., 912 So. 2d 34, 39 (Fla.

4th DCA 2005) (procedural unconscionability can be demonstrated by the relative

unequal bargaining power of the parties); Fonte v. AT&T Wireless Services, Inc.,

903 So. 2d 1019 (Fla. 4th DCA 2005) (considering evidence that party was in a

vulnerable state and whether there was an ability to cancel the contract after signing);

Orkin Exterminating Co. v. Petsch, 872 So. 2d 259, 265 (Fla. 2d DCA 2004) (“The

procedural component of unconscionability concerns the manner in which the

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contract was entered,” noting that it involves considering facts such as the relative

bargaining power of the parties and whether the parties bargained for the questioned

provision). Again, none of these cases were decided on a motion to dismiss.

Landlord makes allegations of other circumstances that are supported by

Florida case law as showing procedural unconscionability, such as the unequal

bargaining power of the parties and the “take it or leave it” basis. Am. Comp., ¶¶10,

25, 34, 38, 39, 45, 46. See, e.g., Fonte, 903 So. 2d 1019, 1025 (Fla. 4th DCA 2005);

Bexley, 743 So. 2d 570, 574 (Fla. 1st DCA 1999); Kohl, 398 So. 2d 865, 867 (Fla.

4th DCA 1981); Romano, 861 So. 2d 59, 62 (Fla. 4th DCA 2003).

b. Landlord has alleged substantive unconscionability.

Landlord also alleges that the actual contract terms, when applied, are

substantively outrageous and unfair. Am. Compl., ¶¶ 2, 52. 55, 56, 54, 61. The

purpose of co-tenancy requirements is to protect the tenants in situations where the

occupancy of co-tenants negatively affects the tenant's sales. But, Dicks has not been

negatively impacted by the Mall’s occupancy. Am. Compl., ¶¶ 2, 52. Further, the

Ongoing Co-Tenancy Requirement depends on Mall tenants, but Dicks has nothing

to do with the Mall. Am. Compl., ¶¶ 38, 39, 48. Dicks’ storefront is on the main

highway and not associated with the Mall, making it highly visible to shoppers,

regardless of the Mall’s status. Id. Landlord cannot control the Mall tenants or how

the Mall is developed. Am. Compl., ¶ 44.

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The full amount of rent outstanding, not including CAM and taxes, under the

Lease through August 2017, is $276,409.67. This is more than double what Dicks

has paid to Landlord. Am. Compl., ¶ 61. If Dicks continues to pay only Substitute

Rent through the end of the initial lease term, the total deficiency under the Lease

will be $3,940,293.00, which does not include CAM and taxes. Am. Compl., ¶ 64.

Dicks could also extend the Lease for another 28 years. Am. Compl., ¶ 58.

It is “shocking” for Dicks to pay $4 million less during the initial Lease term

when Dicks’ sales have not suffered, but only increased, and when Landlord cannot

control the unrelated Mall’s tenants. Dicks tries to dismiss the fact that its sales at

this location are only increasing. But, Dicks’ increased success is evidence that the

provisions, as applied, as substantively unconscionable. This is an outrageous and

unconscionable penalty.

Landlord has sufficiently alleged that this penalty is procedurally and

substantively unconscionable, and that Dicks is enforcing this penalty by not paying

full Rent, thereby showing an actual, present, and practical need for a declaration

from the Court. “When it is claimed or appears to the court that the rental agreement

or any provision thereof may be unconscionable, the parties will be afforded a

reasonable opportunity to present evidence as to meaning, relationship of the parties,

purpose, and effect to aid the court in making the determination.” 34 Fla. Jur 2d

Landlord and Tenant § 60.

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In sum, Dicks does not present a single case where procedural

unconscionability was decided on a motion to dismiss. Each plaintiff had the

opportunity to conduct discovery to support its allegations of procedural

unconscionability, which can be shown in a multitude of ways, and in varying

degrees. Landlord should be afforded a reasonable opportunity to present evidence

as to the unconscionable circumstances surrounding execution of the Lease and the

substantive unconscionable effect of the Ongoing Co-Tenancy Requirement.

ii. Landlord has properly alleged that the Ongoing Co-Tenancy
and Substitute Rent Provisions are Unlawful Liquidated
Damages.

Landlord has also properly pled its action for declaratory relief because

allowing Tenant to only pay Substitute Rent in this circumstance amounts to

unlawful liquidated damages.

Penalty provisions disguised as liquidated damages provisions have also been

found to be unenforceable in Florida. See, e.g., Coleman v. B.R. Chamberlain &

Sons, Inc., 766 So.2d 427, 429 (Fla. 5th DCA 2000) (“Florida courts will not enforce

a penalty which is ‘disproportionate to the damages.’”); Hyman v. Cohen, 73 So. 2d

393, 402 (Fla.1954) (“in doubtful cases, the tendency of the courts is to construe a

provision for the payment of an arbitrary sum upon a breach of a contract as a

provision for a penalty....”).

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Courts have often found that rent abatement provisions analogous to the

instant Ongoing Co-Tenancy Requirement and Substitute Rent provisions are

unenforceable liquidated damages penalties. See, e.g., Grand Prospect Partners,

L.P. v. Ross Dress for Less, Inc., 182 Cal. Rptr. 3d 235 (Ct. App. 2015) (negotiated

rent abatement comprised of 2% gross sales if 70% co-tenancy requirement was not

met was unenforceable liquidated damages penalty); Mark-It Place Foods, Inc. v.

New Plan Excel Realty Tr., 804 N.E. 2d 979, 1004 (Ohio Ct. App. 2004) (negotiated

rent abatement provision was unenforceable liquidated damages penalty); Sunny Isle

Shopping Center, Inc. v. Xtra Super Food Centers, Inc. (D.V.I. 2002) 237 F. Supp.2d

606, (rent abatement provision could be deemed an unenforceable liquidated

damages penalty).

The Substitute Rent provision is an unenforceable liquidated damages

penalty. Landlord receiving only 2% of Dicks’ Gross Sales at the Premises, but never

more than the Minimum Rent (“Substitute Rent”) is entirely arbitrary, especially

when Dicks’ Gross Sales only continue to grow when the Ongoing Co-Tenancy

Requirement is not met. Am. Compl., ¶¶ 48, 52. This penalty bears no reasonable

relationship to any actual damages – which is zero. Lease at 1.5(c)(i); Am. Compl.,

¶ 69.

Florida courts “will not enforce a penalty which is ‘disproportionate to the

damages.’” Coleman, 766 So. 2d at 429 citing Crosby Forrest Products, Inc. v.

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Byers, 623 So.2d 565, 567 (Fla. 5th DCA 1993) (citing 5 Williston on Contracts §

776 at 668). Dicks, by citing to Goldblatt (Motion to Dismiss at n. 7), recognizes

that for liquidated damages to be enforceable, the penalty “must not be so grossly

disproportionate to any damages that might reasonably be expected to follow from

a breach.” Goldblatt v. C.P. Motion, Inc., 77 So. 3d 798, 800 (Fla. 3d DCA 2011).

Again, Dicks relies on a non-binding Tennessee case, which was decided after a trial,

and not on a motion to dismiss, to erroneously suggest that Dicks’ sales are not

relevant. See Hickory Grove, LLC v. Rack Room Shoes, Inc., 2012 WL 1836330

(E.D. Tenn. May 21, 2012); Motion at p. 13. Moreover, the Landlord in Hickory

Grove did not assert that the provision was unconscionable. Id. at ¶ 14. Here,

Landlord alleges that Dicks’ increased sales show that the provisions are

unconscionable. Hickory Grove is clearly distinguishable.

As explained above, Landlord has pled that the penalty is grossly

disproportionate to Dicks’ damages – as Dicks has not suffered any damage

whatsoever from breach of the Ongoing Co-Tenancy Requirement. Dicks tries to

dismiss the fact that its sales at this location are only increasing because it is clear

that its increased sales show that the Substitute Rent is so grossly disproportionate

to any damages.

Dicks also recognizes that for a liquidated damages penalty to be enforceable,

“the damages consequent upon a breach must not be readily ascertainable.” See

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Motion to Dismiss at n. 7, citing Goldblatt, at 800. Here, the condition of the Mall

and its occupancy are in approximately the same state it was in when the Lease was

entered into. Am. Compl., ¶ 65. Thus, any damage was also readily ascertainable at

the time the parties entered into the Lease, obviating the enforceability of liquidated

damages.1

Dicks attempted analogy to Old Navy is misplaced, as that opinion decided a

motion for summary judgment, relying on evidence and testimony - a much different

standard than on a motion to dismiss. Old Navy, LLC v. Ctr. Developments Oreg.,

LLC, 2012 WL 2192284, at *3 (D. Or. June 13, 2012). Moreover, the Lease

provisions are not similar. In deciding the Old Navy provisions were not liquidated

damages, the court relied on its reading that “the provision does not impose any

requirements on [landlord].” Id. at *10. Conversely, Dicks’ Lease imposes tenancy

requirements on Landlord. It states that the “Ongoing Co-Tenancy Requirement”

shall mean, in part, that “at least eighty percent (80%) of the…Mall… “shall be

open, fully staffed, stocked and operated by an Occupant in substantially all of its

premises, for the operation of a retail business by a Required Tenant2.” Lease at 1.7.

1
The Florida Supreme Court has stated that a liquidated damages clause may stand if “damages
are not readily ascertainable at the time the contract is drawn, but ... [equity may] relieve against
the forfeiture if it appears unconscionable in light of the circumstances existing at the time of
breach.” Hutchison v. Tompkins, 259 So.2d 129, 132 (Fla.1972); See also, Coleman, 766 So. 2d at
429 (same).

2
“Required Tenants” are national tenants “operating a minimum of 50 high quality retail stores of
the types typically found in first-class regional shopping centers.” Lease at 1.7.

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These are not “Key” stores, like in Old Navy. They are “Required” Tenants that

“shall be open.” Further, the Landlord’s failure to have the “Required Tenants”

results in an explicit Lease “Violation.” If the “Ongoing Co-Tenancy Requirement

is not satisfied…(such event being the "Ongoing Co-Tenancy Violation”), Tenant

shall then pay to Landlord…Substitute Rent.” Lease at 1.7.

The Old Navy court also focused on the fact that the lease “does not promise

to keep Key Stores at the Mall.” Old Navy, 2012 WL 2192284, at *10 (emphasis in

original). Dicks’ Lease makes the Landlord promise not to use the Mall or the

Shopping Center for any purposes “inconsistent with a first-class shopping center,”

i.e. only “Required Tenants,” which are those found in first-class regional shopping

centers, can be tenants. Lease at 1.4 and 1.7.

Also important in Old Navy was that the lease explicitly provided it was “not

intended to restrict the freedom of Landlord to enter into leases or operating

agreements with any party with whom Landlord desires in the exercise of its sole

and absolute discretion.” Old Navy, 2012 WL 2192284, at *10. Unlike Old Navy,

Dicks’ Lease does not allow Landlord freedom to enter into any other leases it

desires. The Lease explicitly prohibits Landlord from using its own Shopping Center

for any non-retail, restaurant, or entertainment purposes, or for any purposes

“inconsistent with a first-class shopping center.” Am. Compl., ¶¶ Lease at 1.4.

Landlord also cannot lease any land within three miles of the Premises (the

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“Restricted Property”) that will sell any of the items listed in Section 1.5 of the

Lease (“Precluded Use Activities”).

Landlord has made sufficient allegations, which the Court must regard as true

at this juncture, to state a claim for declaratory relief. Landlord should be permitted

a reasonable opportunity to present evidence as to the setting, purpose, and effect of

the Ongoing Co-Tenancy Requirement.

B. Landlord Properly Alleged Facts to Support its Claim for Recession.

“Under the doctrine of impossibility of performance or frustration of purpose,

a party is discharged from performing a contractual obligation which is impossible

to perform and the party neither assumed the risk of impossibility nor could have

acted to prevent the event rendering the performance impossible.” Marathon

Sunsets, Inc. v. Coldiron, 189 So. 3d 235, 236 (Fla. 3d DCA 2016) (citations omitted)

(emphasis supplied). Landlord has alleged, clearly and multiple times, that it could

not have acted to prevent its inability to control the Mall.3 At no time during the

Lease could it have controlled the Mall’s tenants. Am. Compl., ¶¶ 3, 44, 115, 117.

Further, the Mall Affiliate was not bound by the Co-Tenancy Provisions of the

Lease. Am. Compl, ¶ 116. Thus, it would have been objectively impossible, at the

time the Lease was executed or now, for Landlord to perform, comply, or require

3
Dicks erroneously claims that Landlord has given up control of the Mall. Motion, p. 14, 18.
However, Landlord has clearly alleged that “[a]t the time of the execution of the Lease…the Mall
was not under the Landlord’s control.” Am. Compl., ¶ 117; see also, Am. Compl., ¶¶ 3, 44, 115.

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compliance with the Co-Tenancy Requirements. Am. Compl., ¶ 117.

Landlord has also clearly alleged that both parties were mutually mistaken as

to the redevelopment and control of the Mall at the time the Lease was executed.

Am. Compl., ¶ 119 (“[A]t the time of the execution of the Lease, both Dicks and

Landlord were mistaken…”). Thus, Dicks’ erroneous attempt to characterize the

mutual mistakes as happening after the Lease was executed should be flatly rejected

and Rawson v. UMLIC VP, L.L.C., 933 So. 2d 1206 (Fla. 1st DCA 2006) is

inapplicable.

Moreover, the parties did not allocate the risk of mistaken as to as to the

quality of the Malls’ tenants. At the time the Lease was executed, the Mall was not

occupied by “high quality retail stores” Am. Compl. ¶ 37. But, the Lease mistakenly

requires the Mall to be occupied by “high quality retail stores,” and mistakenly

required the Mall to continue this level of quality, even though it had not attained

that quality of tenants at the time the Lease was executed. Am. Compl. ¶ 37; Lease

at 1.7.

Accordingly, Landlord has stated a claim for recession based on impossibility

of performance, frustration of purpose, and mutual mistake.

C. Landlord is Entitled to a Mutual Termination Remedy.

In Lefemine v. Baron, the Florida Supreme Court stated “[w]e recognize that

a lack of mutuality of remedies between the parties may be a separate reason why a

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court may refuse to enforce a default provision of a contract.” 573 So. 2d 326 (Fla.,

1991)(citing Blue Lakes Apartments, Ltd. v. George Gowing, Inc., 464 So. 2d 705

(Fla. 4th DCA 1985)).

Contractual provisions that limit the parties’ respective remedies must be

reasonable to be enforced. Ocean Dunes of Hutchinson Island Development Corp.

v. Colangelo, 463 So. 2d 437 (Fla. 4th DCA 1985). Where a contract’s damages

clause effectively eliminates the availability of remedies, such provision constitutes

a penalty and is invalid as a matter of law. Cloud v. Schenck, 869 So. 2d 709 (Fla.

1st DCA 2004). Dicks’ “heads-I-win, tails-you-lose” approach to the On-Going Co-

Tenancy and Substitute Rent provisions is so rapaciously skewed as to be patently

unreasonable. It subverts the Lease by permitting one party to breach with impunity.

The On-Going Co-Tenancy provision and penalties flowing from it show that

Dicks’ obligations are wholly illusory, while Landlord’s are quite real. Such

provisions are antithetical to the concept of fair dealing in the marketplace and will

not be enforced by courts of law. See Blue Lakes, Inc., 464 So. 2d at 709.

Accordingly, Landlord has stated a claim in equity for a mutual termination

remedy.

D. Landlord has Properly Alleged Claims of Quantum Meruit and
Unjust Enrichment.

To succeed on a claim of quantum meruit, a plaintiff must show “that the

plaintiff provided, and the defendant assented to and received, a benefit in the form

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of goods or services under circumstances where, in the ordinary course of common

events, a reasonable person receiving such a benefit normally would expect to pay

for it.” W .R. Townsend Contracting, Inc. v. Jensen Civil Const., Inc., 728 So.2d 297,

305 (Fla. 1st DCA 1999).

Landlord is permitted to plead quantum meruit in addition to its breach of

contract claim. Dicks erroneously relies on Land Co. of Osceola County, LLC v.

Genesis Concepts, Inc., 169 So. 3d 243 (Fla. 4th DCA 2015). Genesis proceeded

through the course of litigation on both claims of breach of contract and quantum

meruit, but the Fourth DCA noted that it was wholly unclear from the record why

Genesis abandoned its breach of contract claim and proceeded to trial only on a

theory of quantum meruit. Id. at 245. Accordingly, Genesis does not support Dicks’

claim that Landlord’s quantum meruit cause of action cannot proceed at this

juncture.

A contract implied in law operates when “there is no contract ‘to provide a

remedy where one party was unjustly enriched, where that party received a benefit

under circumstances that made it unjust to retain it without giving

compensation.’” Ocean Communications, Inc. v. Bubeck, 956 So. 2d 1222, 1225

(Fla. 4th DCA 2007) citing Commerce P'ship. 8098 Ltd. P'ship v. Equity Contracting

Co., Inc., 695 So. 2d 383, 386 (Fla. 4th DCA 1997).

Landlord asserts that if the Ongoing Co-Tenancy Requirement and Substitute

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Rent provisions remain, there is “no contract to provide a remedy where [Dicks] was

unjustly enriched.” Id. Dicks relies on Bubek, but like many of the other cases relied

on by Dicks, Bubek was not decided on a motion to dismiss, and instead proceeded

to a full trial on the plaintiff’s claims for breach of contract and unjust enrichment.

Accordingly, Bubek does not support Dicks’ argument that this count should be

dismissed without the opportunity for discovery.

“Unjust enrichment is equitable in nature and cannot exist where payment has

been made for the benefit conferred.” Landlord alleges that it has not received the

full contract payment due to it under the Lease and for the benefit conferred. Thus,

Dicks’ reliance on Gene B. Glick Co., Inc. is misplaced, since the defendant in that

case “paid Glick Company the full amount of its contract for the construction

project.” Id. Here, Dicks has not paid the full amount of its contract, and thus

Landlord’s claim for unjust enrichment should stand.

E. Landlord has Properly Alleged Dicks’ Breach of the Implied Covenant
of Good Faith and Fair Dealing.

Florida law “recognizes an implied covenant of good faith and fair dealing in

every contract. This covenant is intended to protect the reasonable expectations of

the contracting parties in light of their express agreement.” QBE Ins. Corp. v.

Chalfonte Condo. Apartment Ass'n, Inc., 94 So. 3d 541, 548 (Fla. 2012) (internal

citations omitted).

Landlord acknowledges that the duty of good faith must “relate to the

20
performance of an express term of the contract.” Id. Despite Dicks’ claims to the

contrary, Landlord has alleged that Dicks breached the express terms of the Lease

by failing to pay CAM and real estate taxes. Am. Compl., ¶¶ 62-63. The Lease

clearly provides that:

In addition to the payment of Minimum Rent as
provided in this Article IV and Substitute Rent (as
defined in Section 1.5) and Tenant shall pay to Landlord
as "Additional Rent" all other sums of money and charges
required to be paid by Tenant to Landlord under this Lease
whether or not the same are designated Additional Rent,
including but not limited to Tenant's CAM
Contribution as provided in Section 14.3 and Tenant's
Portion of real estate taxes as provided in Section 5.1.

Lease at Sect. 4.1(c) (emphasis supplied).

Thus, even if Dicks was permitted to pay Substitute Rent, which it is not,

Dicks is still obligated under Section 4.1 of Lease to pay CAM and taxes in addition

to the payment of Substitute Rent. Id. See also Lease at Sect. 14.3 (requiring CAM

payment “without any setoff or deduction”).

Taking Landlord’s allegations as true, Dicks has failed to pay CAM and taxes.

Am. Compl., ¶ 63. This failure constitutes an express breach of Section 4.1 of the

Lease, and therefore, Landlord, as a matter of law, may bring its claim for breach of

the implied covenant of good faith and fair dealing. As such, dismissal of this count

is not warranted.

21
WHEREFORE, Plaintiff respectfully requests that Dicks’ Motion to Dismiss

be denied.

Respectfully Submitted on October 18, 2017.

By: ___/s/ Nicolette C. Vilmos
Nicolette C. Vilmos, P.L.

Case Info

Judge

John E Jordan Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

October 18, 2017

Case Filing Date

May 10, 2017

County

Parties

DICKS SPORTING GOODS INC Defendant
JAMES WALSON Attorney for the Defendant
NICOLETTE VILMOS Attorney for the Plaintiff
UP FIELDGATE US INVESTMENTS EAST COLONIAL LLC Plaintiff
Ronald Edwards Attorneys for Defendants
Michael Krekstein Attorney
GEORGE SCOTT Attorney
Linda White Attorneys for Plaintiffs
Ronald Dusek Attorney
Lacey Corona Attorneys for Plaintiffs
James Engel Attorneys for Plaintiffs
Charles Valente Attorney

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