||SUPREME COURT OF FLORIDA
||1979.FL.48015; 378 So. 2d 774
||November 15, 1979
||ARTHUR R. POMPONIO, ET AL., PETITIONERS,
THE CLARIDGE OF POMPANO CONDOMINIUM, INC., ETC., ET AL., RESPONDENTS
||Curtin R. Coleman, of Coleman, Leonard &
Morrison, and Davis W. Duke, Jr., of McCune, Hiaasen, Crum, Ferris &
Gardner, Fort Lauderdale, for petitioners.
||Jeffrey E. Streitfeld and Mark B. Schorr, of
Becker, Poliakoff & Sachs, Fort Lauderdale, for respondents.
||Before England, C.j. Boyd, Overton and
Sundberg, JJ., Concur Overton, J., Concurs specially with an opinion
Adkins, J., Concurs in result only Alderman, J., Dissents
present cause is before us to determine the constitutionality of
Florida Statutes (1977), which provides for the deposit of rents into the
registry of the court during litigation involving obligations under a
condominium lease. XXX1 We have jurisdiction
article V, section
of the Florida Constitution. The question of whether this statute
impermissibly impairs the obligation of contracts in violation of article
I, section 10 of the Florida and federal constitutions an issue expressly
reserved in an earlier case concerning the statute's operation XXX2
is now squarely presented.
Claridge of Pompano Condominium, Inc., ("the Association") and
several individual unit owners who are members of the Association brought
suit against the developer of the condominium and the lessors of a
ninety-nine year recreational lease associated with the condominium. XXX3
The Association, as a representative of the unit owners, is the named
lessee under the recreational lease. As required by
the trial court granted the Association and unit owners' motion to permit
payment of rents into the registry of the court, despite the developer and
lessors' contention that the provision is unconstitutional. By this
appeal, the developer and lessors seek to have the ruling reversed. We
hold that the statute is unconstitutional.
parties argue, respectively, that the rent deposit statute either
permissibly modifies a contractual remedy or impermissibly impairs
substantial contract rights and obligations. Yet a proper analysis of this
issue cannot hinge exclusively on any supposed distinction between
"remedies" and "obligations." The United States
Supreme Court has discarded this distinction as "an outdated
formalism," XXX4 and we choose to do
likewise. To formulate a more logical approach to the question of
impairment, it is necessary at the outset to examine the interpretive
development of the contract clause in the decisions of the United States
||While the intent of the framers with respect
to the contract clause has generated considerable speculation, its origins
remain too obscure to be of any assistance in its construction, XXX5
it is nonetheless clear that in the early decisions of the United States
Supreme Court the clause was interpreted literally as a strict
prohibition. XXX6 As with other seemingly
absolute constitutional provisions, however, it soon became evident that
some degree of flexibility would have to be read into the clause to
ameliorate the harshness of such rigid application. XXX7
In order to accommodate necessary legislation without deviating from the
principle that all laws impairing the obligations of contract are
constitutionally prohibited, the Court developed two basic analytical
devices the "obligation-remedy" distinction and the
"reserved powers" doctrine XXX8 both
of which dominated contract clause interpretation for the next century.
||The "Obligation-Remedy" Test
||Home Building & Loan Association v.
Blaisdell, 290 U.S. 398, 54 S. Ct. 231, 78 L. Ed. 413 (1934), is the most
important case in the history of contract clause interpretation. XXX9
In Blaisdell, the Court upheld a mortgage moratorium statute that
Minnesota had enacted to provide relief for homeowners threatened with
foreclosure. The statute enabled a court to extend the time for redemption
beyond that provided for in the mortgage contract. Though the statute
directly affected lenders' foreclosure rights, the Court ruled that it did
not violate the contract clause, reasoning that "the state . . .
continues to possess authority to safeguard the vital interests of its
||In its decision, the Blaisdell majority
traced the judicial history of the obligation-remedy distinction XXX11
and the reserved powers doctrine XXX12 in
contract clause analysis. It then concluded:
||It is manifest from this review of our
decisions that there has been a growing appreciation of public needs and
of the necessity of finding ground for a rational compromise between
individual rights and public welfare. . . .
||It is no answer to say that this public need
was not apprehended a century ago, or to insist that what the provision of
the Constitution meant to the vision of that day it must mean to the
vision of our time. . . . "The case before us must be considered in
the light of our whole experience and not merely in that of what was said
a hundred years ago." XXX13
||Having jettisoned the analytical framework
which governed prior contract clause cases, the Court formulated a new
test against which legislation would be measured:
||The question is not whether the legislative
action affects contracts incidentally, or directly or indirectly, but
whether the legislation is addressed to a legitimate end and the measures
taken are reasonable and appropriate to that end. XXX14
||Thus, beginning with Blaisdell, the Court
began to permit certain "reasonable" impairments of contractual
obligations. XXX15 This new and more flexible
approach to contract clause analysis later was refined and developed by
the Court in three major cases. XXX16
||The Evolving "Reasonableness" Test
||In City of El Paso v. Simmons, 379 U.S. 497,
85 S. Ct. 577, 13 L. Ed. 2d 446 (1965), the Court stated that it would not
even "pause to consider . . . again the dividing line under federal
law between "remedy' and "obligation' . . . ." XXX17
Instead, the majority noted that "decisions dating from (Blaisdell )
have not placed critical reliance on the distinction between obligation
and remedy," and proceeded to demonstrate that its post-Depression
rulings had been made "without any regard to whether the measure was
substantive or remedial." XXX18
Recognizing that " "(t)he Constitution is "intended to
preserve practical and substantial rights, not to maintain theories,"
" XXX19 the Court in Simmons clearly
refuted the notion that statutes could be properly measured by any
criteria other than reasonableness:
||This Court's decisions have never given a
law which imposes unforeseen advantages or burdens on a contracting party
constitutional immunity against change. . . . Laws which restrict a party
to those gains reasonably to be expected from the contract are not subject
to attack under the Contract Clause, notwithstanding that they technically
alter an obligation of a contract. XXX20
||In resolving the controversy before it, the
Simmons majority applied what Justice Black decried in dissent as a
"balancing" test, XXX21 giving due
consideration for the "buyer's undertaking," whether "the
buyer was substantially induced to enter into these contracts"
because of the promise, and the significance of the "State's vital
interest," XXX22 and concluded that the
Texas statute at issue was constitutionally permissible because "(t)
he measure taken . . . was a mild one indeed, hardly burdensome to the
purchaser . . ., but nonetheless an important one to the State's
||The next major decision in the interpretive
development of the contract clause was United States Trust Co. v. New
Jersey, 431 U.S. 1, 97 S. Ct. 1505, 52 L. Ed. 2d 92 (1977). XXX24
The Court's analysis in United States Trust both expanded upon the
"balancing" test of Simmons and refined the
"reasonableness" standard of Blaisdell:
||(a) finding that there has been a technical
impairment is merely a preliminary step in resolving the more difficult
question whether that impairment is permitted under the Constitution.
||The Court concluded that the correct
standard to be employed in assessing the validity of legislation affecting
a state's own contracts is that:
||(a)s with laws impairing the obligations of
private contracts, An impairment may be constitutional if it is reasonable
and necessary to serve an important public purpose. XXX26
||In finding that the challenged statute did
not satisfy this test, the Court emphasized that while "(t)he extent
of impairment is certainly a relevant factor in determining its
reasonableness," an enactment cannot be considered
"necessary" if the legislature "without modifying the
covenant at all, . . . could have adopted alternative means of achieving
their . . . goals," because "a State is not free to impose a
drastic impairment when an evident and more moderate course would serve
its purposes equally well." XXX27
||In its most recent pronouncement on the
subject, Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 98 S. Ct.
2716, 57 L. Ed. 2d 727 (1978), the Court invalidated a Minnesota law which
retroactively imposed upon certain private companies with voluntary
pension plans additional obligations as to employees who would not have
been entitled to such benefits under the original terms of the plan.
Without any mention of the obligation-remedy distinction, the majority
reviewed the underpinnings of the Court's post Blaisdell decisions and
formulated its statement of the proper approach to contract clause
||In applying these principles to the present
case, the first inquiry must be whether the state law has, in fact,
operated as a substantial impairment of a contractual relationship. The
severity of the impairment measures the height of the hurdle the state
legislation must clear. Minimal alteration of contractual obligations may
end the inquiry at its first stage. Severe impairment, on the other hand,
will push the inquiry to a careful examination of the nature and purpose
of the state legislation. XXX28
||Several factors to be considered in this
balancing test were identified in Spannaus :
||(a) Was the law enacted to deal with a
broad, generalized economic or social problem. XXX29
||(b) Does the law operate in an area which
was already subject to state regulation at the time the parties'
contractual obligations were originally undertaken, or does it invade an
area never before subject to regulation by the state
||(c) Does the law effect a temporary alteration of the
contractual relationships of those within its coverage, or does it work a
severe, permanent, and immediate change in those relationships irrevocably
and retroactively? XXX31
||Analysis and Conclusion
||We recognize that this Court, when
construing a provision of the Florida Constitution, is not bound to accept
as controlling the United States Supreme Court's interpretation of a
parallel provision of the federal Constitution. Yet such rulings have long
been considered helpful and persuasive, and are obviously entitled to
great weight.XXX32 With this in mind, we now
choose to adopt an approach to contract clause analysis similar to that of
the United States Supreme Court. That Court's decisionsXXX33
in this area of law convince us that such an approach is the one most
likely to yield results consonant with the basic purpose of the
||In our view, any realistic analysis of the
impairment issue in Florida must logically begin both with Yamaha Parts
Distributors Inc. v. Ehrman,XXX34 which
applied the well-accepted principle that virtually no degree of contract
impairment is tolerable in this state, and with the notion enunciated in
Louisiana ex rel. Ranger v. New Orleans,XXX35
that "he who pays too late, pays less."XXX36
These concepts direct our inquiry to the actual effect of the rent deposit
statute on the lessor's contractual right to receive its bargained-for
rent. That effect, when fully analyzed, persuades us that in the absence
of contractual consentXXX37 significant
contract rights are unreasonably impaired by the statute's operation.XXX38
||Preliminarily, it should be noted that the
deposit into court of moneys which one or another contract litigant may
withdraw only after incurring some legal cost or a modest delay is
constitutionally permissible.XXX39 Our
conclusion in Yamaha that "virtually" no impairment is tolerable
necessarily implies that some impairment is tolerable, although perhaps
not so much as would be acceptable under traditional federal contract
||To determine how much impairment is
tolerable, we must weigh the degree to which a party's contract rights are
statutorily impaired against both the source of authority under which the
state purports to alter the contractual relationship and the evil which it
seeks to remedy. Obviously, this becomes a balancing process to determine
whether the nature and extent of the impairment is constitutionally
tolerable in light of the importance of the state's objective, or whether
it unreasonably intrudes into the parties' bargain to a degree greater
than is necessary to achieve that objective.
of course, does more than provide a procedure for the deposit of rents
subject to disbursement upon compliance with some procedural showing or
its equivalent.XXX40 This statute potentially
allows the retention in court of at least some portion of the deposited
rent during the entire term of litigation. Barring the current use of
court-retained rent moneys is an economic deprivation for which a landlord
obviously has not bargained, producing potential erosion of value (at
least in our persistently inflationary economy) which goes beyond mere
inconvenience. To this extent at least, the statute "impairs"
the landlord's contract.XXX41
||The degree of impairment created by
is confined to amounts deemed by the legislature not to be essential to
the maintenance of the property in dispute. Withdrawals are authorized for
amounts "necessary for payment of taxes, mortgage payments,
maintenance and operating expenses, and other necessary expenses incident
to maintaining and equipping the leased facilities." XXX42
This formulation precludes a uniform level of impairment in each case,
inasmuch as the impairment in any particular situation will depend
directly on the disparity between the contract amount of rent and the
landlord's property maintenance obligations that is, the lessor's built-in
profit.XXX43 In this formulation, of course,
all other needs or desires of the lessor for its promised rents are wholly
||On the other side of the ledger is the
state's interest in requiring a unit owner's deposit of leasehold rents
into court during the course of litigation. This provision rests on the
state's exercise of its police power to promote the health, safety, and
welfare of its citizens. While the specific objectives for
are neither expressly articulated nor plainly evident from a reading of
the statute,XXX45 the litigants have suggested
that the legislature's concern was the protection of unit owners from the
lessor's foreclosure for non-payment of rent during the pendency of the
litigation. To this assertion we have two answers. There is to our
knowledge neither a documented threat of massive condominium foreclosures
in Florida nor any documentation of the underlying premise that unit
owners would withhold rents from landlords pending litigation with them.
||We believe that the balance between the
state's probable objectives and its method of implementation, on the one
hand, and the degree of contract impairment inflicted in furtherance of
its policy, on the other, favors preservation of the contract over this
exercise of the police power. Bearing on our view is the fact that the
manner in which the police power has been wielded here is not the least
restrictive means possible. See City of El Paso v. Simmons, 379 U.S. 497,
516-17, 85 S. Ct. 577, 13 L. Ed. 2d 446 (1965). Contrast, for example,
Florida's Residential Landlord and Tenant Act, which similarly requires
the payment of rent into the court's registry during the pendency of a
lawsuit between parties to the lease,XXX46 but
which authorizes the court to disburse to a landlord all or any portion of
the funds on deposit upon a showing of "actual danger of loss of the
premises or Other personal hardship resulting from the loss of rental
income from the premises."XXX47 In that
statute the legislature has acknowledged that the consequences of rent
detention may extend to a deprivation of sums needed for purposes other
than the preservation of the controverted property. The severity of
impairment wreaked by
would have been mitigated by a "personal hardship" provision
like that in the landlord-tenant act, but none is present.XXX48
||Therefore, in the face of an express
constitutional prohibition against any law "impairing the obligation
of contracts,"XXX49 the state's
justification for an exercise of the police power to impair the lessor's
contractual bargain does not, in our opinion, provide sufficient
countervailing considerations. As applied retroactively, absent a lessor's
express consent to its incorporation into the terms of the contract, the
statute is invalid. Accordingly, the trial court's order authorizing
payment of rents into the registry of the court is hereby vacated.
||It is so ordered.
||BOYD, OVERTON and SUNDBERG, JJ., concur.
||OVERTON, J., concurs specially with an
||ADKINS, J., concurs in result only.
||ALDERMAN, J., dissents.
||OVERTON, Justice, concurring specially.
||I concur. This Court's recent construction
Florida Statutes (1977), in Beckwith v. Webb's Fabulous Pharmacies, Inc.,
374 So.2d 951
(Fla.1979), expressly held that moneys deposited in the registry of the
court are "held by a public officer in a public account (and) accrue
to the benefit of all of the people." We further stated that
"interest earned on the clerk of the circuit court's registry account
is not private property." This holding precludes any disposition of
these earned interest funds to the proper prevailing party. Because of our
I must agree that
which mandates the deposit of rents into the registry of the courts during
litigation concerning a condominium lease, does in fact constitute an
impairment of rights guaranteed under the contract clause and due process
provisions of the Florida and United States Constitutions. With the prime
rate of interest at an all-time high, a party's loss of earned interest is
a significant financial deprivation.
||The fact that
has the effect of mandating the forfeiture of interest earned on rents due
under the lease when there is litigation concerning the lease makes this
depository provision of the statute invalid. It should be noted that the
clerk of the circuit court receives a fee for his services apart from the
interest earned on deposited funds. §
||In my view, if the trial court had the
authority to direct the disposition of interest earned and the lessors or
lessees could be made whole if their position was upheld at the conclusion
of the proceedings, then such a depository arrangement would be
any action by the lessor to enforce a lien for rent payable or in any
action by the association or a unit owner with respect to the obligations
of the lessee or the lessor under the lease, the unit owner may raise any
issue or interpose any defenses, legal or equitable, that he may have with
respect to the lessor's obligations under the lease. If the unit owner
initiates any action or interposes any defense other than payment of rent
under the lease, the unit owner or the association shall pay into the
registry of the court any allegedly accrued rent and the rent which
accrues during the pendency of the proceeding, when due. If the unit owner
fails to pay the rent into the registry of the court, it shall constitute
an absolute waiver of the unit owner's defenses other than payment, and
the lessor shall be entitled to default. When the unit owner has deposited
the required funds into the registry of the court, the lessor may apply to
the court for disbursement for all or part of the funds shown to be
necessary for the payment of taxes, mortgage payments, maintenance and
operating expenses, and other necessary expenses incident to maintaining
and equipping the leased facilities. The Court, after preliminary hearing,
may award all or part of the funds on deposit to the lessor for such
Century Village, Inc. v. Wellington, E, F, K, L, H, J, M, & G,
361 So.2d 128,
||XXX3 Although the
Pompano lease was executed prior to the enactment of
or its predecessor, section 711.63(4), Florida Statutes (1975), the Court
specifically held in Century Village that this provision was intended by
the legislature to be applied retroactively. Unlike the lease considered
in Century Village, the present condominium lease does not incorporate
statutory amendments enacted subsequent to the contract's execution.
||XXX4 United States
Trust Co. v. New Jersey, 431 U.S. 1, 19 n.17, 97 S. Ct. 1505, 52 L. Ed. 2d
||XXX5 "In the
construction of the contract clause, the debates in the Constitutional
Convention are of little aid." Home Bldg. & Loan Ass'n v.
Blaisdell, 290 U.S. 398, 427, 54 S. Ct. 231, 235-36, 78 L. Ed. 413 (1934).
See also Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 257, 98 S.
Ct. 2716, 57 L. Ed. 2d 727 (1978) (Brennan, J., dissenting). The most
unkind of observers has concluded that the provision was "apparently
motivated by the economic self-interest of the framers," Comment,
Revival of the Contract Clause, 39 Ohio St.L.J. 195, 196 (1978), but a
variety of other, more noble, purposes have also been suggested. See
Comment, The Contract Clause and the Constitutionality of Retroactive
Application of Exemption Statutes: A Reconsideration, 9 Pac.L.J. 889,
892-93 (1978), and sources cited therein.
||XXX6 See, e. g.,
Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 4 L.
Ed. 629 (1819). Until the late nineteenth century, the contract clause was
the subject of the Court's attention more frequently than any other
provision except the commerce clause, B. Wright, The Contract Clause of
the Constitution 91-92 (1938), and as the Court itself recently observed,
"it was perhaps the strongest single constitutional check on state
legislation during our early years as a Nation . . . ." Allied
Structural Steel Co. v. Spannaus, 438 U.S. 234, 241, 98 S. Ct. 2716, 2721,
57 L. Ed. 2d 727 (1978).
||XXX7 See generally
Comment, The Contract Clause Reemerges: A New Attitude Toward Judicial
Scrutiny of Economic Legislation, 1978 S.Ill.U.L.J. 258, 260.
||XXX8 For a brief
discussion and comparison of these two approaches, See, e. g., Comment,
Revival of the Contract Clause, 39 Ohio St.L.J. 195, 196-98 (1978);
Comment, Supra note 4, at 260-62.
||XXX9 The United
States Supreme Court has itself stated that "(t)he Blaisdell opinion
. . . amounted to a comprehensive restatement of the principles underlying
the application of the Contract Clause," City of El Paso v. Simmons,
379 U.S. 497, 508, 85 S. Ct. 577, 583-84, 13 L. Ed. 2d 446 (1965), and
"is regarded as the leading case in the modern era of Contract Clause
interpretation." United States Trust Co. v. New Jersey, 431 U.S. 1,
15, 97 S. Ct. 1505, 1514, 52 L. Ed. 2d 92 (1977).
||XXX10 290 U.S. at
434, 54 S. Ct. at 238-39.
||XXX11 Id. at
429-34, 54 S. Ct. 231.
||XXX12 Id. at
434-38, 54 S. Ct. 231.
||XXX13 Id. at
442-43, 54 S. Ct. at 241-42 (quoting from Missouri v. Holland, 252 U.S.
416, 433, 40 S. Ct. 382, 64 L. Ed. 641 (1920)).
||XXX14 290 U.S. at
438, 54 S. Ct. at 240. In our opinion, however, there is considerable
merit to the argument that, without regard to the particular approach
which it claimed to be applying, the Court both before and after Blaisdell
actually proceeded to work practical solutions based on the facts and
circumstances of each case. See Comment, The Role of the Contract Clause
in Municipalities' Relations with Creditors, 1976 Duke L.J. 1321, 1327. If
this theory is correct, then the "new test" unveiled in
Blaisdell was really no more than an attempt to restate what the Court had
actually been doing all along, with an implicit admission that the
traditional obligation-remedy distinction had been used merely for the
purpose of post-analytical labeling and categorization.
Supra note 5, at 198.
||XXX16 See notes
17-31 and accompanying text Infra.
||XXX17 379 U.S. at
506, 85 S. Ct. at 582.
||XXX18 Id. at
506-07 n.9, 85 S. Ct. at 582-83 n.9.
||XXX19 Id. at 515,
85 S. Ct. at 587 (quoting from Faitnote Iron & Steel Co. v. City of
Asbury Park, 316 U.S. 502, 514, 86 L. Ed. 1629, 62 S. Ct. 1129 (1942)).
||XXX20 379 U.S. at
515, 85 S. Ct. at 587.
||XXX21 Id. at 517,
528-33, 85 S. Ct. 577 (Black, J., dissenting).
Id. at 514-15, 85 S. Ct. at 587.
Id. at 516-17, 85 S. Ct. at 588.
In United States Trust, the Court had this to say about the
was . . . recognized very clearly that the distinction between remedies
and obligations was not absolute. . . . More recent decisions have not
relied on the remedy/obligation distinction, primarily because it is now
recognized that obligations as well as remedies may be modified without
necessarily violating the Contract Clause. Although now largely an
outdated formalism, the remedy/obligation distinction may be viewed as
approximating the result of a more particularized inquiry into the
legitimate expectations of the contracting parties. 431 U.S. at 19 n.17,
97 S. Ct. at 1517 n.17 (citations omitted and emphasis added).
Id. at 21-22, 97 S. Ct. at 1517-18. The majority put to rest any notion
that a "reasonableness" standard was utilized in Blaisdell
solely because of the emergency conditions which prompted the Minnesota
legislation at issue in that case:
suggested further limitations that have since been subsumed in the overall
determination of reasonableness. . . . Undoubtedly the existence of an
emergency and the limited duration of a relief measure are factors to be
assessed in determining the reasonableness of an impairment, but they
cannot be regarded as essential in every case. Id. at 22-23 n.19, 97 S.
Ct. at 1518 n.19. Although the Court in a more recent decision appeared to
make much of the "broad and desperate emergency economic
conditions" of which judicial notice was taken in Blaisdell, it was
careful to point out that the reference "is not to suggest that only
an emergency of great magnitude can constitutionally justify a state law
impairing the obligations of contracts." Allied Structural Steel Co.
v. Spannaus, 438 U.S. 234, 249 & n.24, 98 S. Ct. 2716, 2725, 57 L. Ed.
2d 727, & n.24 (1978).
431 U.S. at 25, 97 S. Ct. at 1519 (emphasis added).
||XXX27 Id. at
27-31, 97 S. Ct. at 1520-22.
||XXX28 438 U.S. at
244-45, 98 S. Ct. at 2723. (footnotes omitted and emphasis added).
Reasoning that the effect of the statute on the employer's contractual
obligation was severe and that the law "simply does not possess the
attributes of those state laws that in the past have survived challenge
under the Contract Clause of the Constitution," See notes 29-31 and
accompanying text infra, the Court concluded that "if the Contract
Clause means anything at all, it means that Minnesota could not
constitutionally do what it tried to do to the company in this case."
Id. at 250-51, 98 S. Ct. at 2726.
||XXX29 Id. at 250
(citing Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398, 445, 54 S.
Ct. 231, 78 L. Ed. 413 (1934)).
||XXX30 Id. (citing
Veix v. Sixth Ward Bldg. & Loan Ass'n, 310 U.S. 32, 38, 60 S. Ct. 792,
84 L. Ed. 1061 (1940)).
||XXX31 Id. (citing
United States Trust Co. v. New Jersey, 431 U.S. 1, 22, 97 S. Ct. 1505, 52
L. Ed. 2d 92 (1977)).
||XXX32 See, e. g.,
Dudley v. Harrison, McCready & Co.,
127 Fla. 687,
173 So. 820,
825 (1937); State v. Hetland,
366 So.2d 831,
836 (Fla. 2d DCA 1979); Leveson v. State,
138 So.2d 361,
364 (Fla. 3d DCA 1962); Houston v. State,
113 So.2d 582,
584-85 (Fla. 1st DCA 1959).
||XXX33 See notes
9-31 and accompanying text Supra.
||XXX34 316 So.2d
||XXX35 102 U.S.
203, 26 L. Ed. 132 (1880).
||XXX36 Id. at 207.
As applied to this rent deposit statute, the rubric should be rephrased to
read that "he who receives payment too late, receives less."
||XXX37 See note 3
recognize the difficulty of narrowing the focus of attention on the issue
of impairment so as to synthesize in subjective consideration the wisdom
or necessity of this legislation. The judicial mind is required to do so,
however, despite the difficulty. We must remind ourselves that the very
real economic problems of condominium unit owners, as magnified by the
alleged imbalance in bargaining power between unit owners and landlords,
and the pervasive influence of the condominium industry on Florida's
economy and citizens, are not alone determinative of the impairment
question. These considerations are relevant, of course, in this context as
well as others. See Avila South Condominium Ass'n v. Kappa Corp.,
347 So.2d 599
The deposit procedure of Florida Rule of Civil Procedure 1.600, for
example, does not "impair" contract rights in the constitutional
sense. Unlike the statutory rent deposit provision at issue in this case,
our rule does not direct that disputed moneys are required to be deposited
in court, but permits such a procedure to be invoked "by leave of the
court." Thus, the decision as to whether or not a temporary
deprivation is justified and whether withdrawal should be allowed in whole
or in part, will be vested in the sound discretion of the trial judge, who
can assess from the circumstances in each case the relative merit or
frivolity of the claim asserted and the legitimate needs of the parties.
Contrast, for example,
Florida Statutes (1977), which authorize a bond to free property from an
In State ex rel. Women's Benefit Ass'n v. Port of Palm Beach Dist.,
121 Fla. 746,
164 So. 851,
856 (1935), we said:
"impair" has been defined as meaning to make worse; to diminish
in quantity, value, excellency or strength; to lessen in power; to weaken.
Whatever legislation lessens the efficacy of the means of enforcement of
the obligation is an impairment. Also if it tends to Postpone or Retard
the enforcement of the contract, it is an impairment. (Emphasis in the
It is unclear whether funds may be withdrawn from the deposited rents in
order to improve the leased premises. One incidental effect of the
uncertainty could well be that lessees' prospects for promised additional
(or improved) facilities, such as tennis courts, swimming pools, or
meeting halls, may be thwarted by a suit instituted by some unit owners
which requires significant rent deposits.
||XXX43 As a
practical matter, the amount of "spread" will also vary from
month to month depending upon such factors as seasonal maintenance needs
and due dates for tax or mortgage payments. Thus, in some months the
landlord may be able to withdraw virtually all, and in others none, of the
||XXX44 See note 48
Infra. The present lessors, in fact, would seem to be effectively barred
from any disbursement under the statute in its present form.
provides that the "unit owner or association shall pay (rents) into
the registry of the court." The provision permits disbursement of
these rents, however, only "(w)hen the unit owner has deposited the
required funds." As the Court stated in Century Village, the terms
"unit owner" and "association" are not
361 So.2d at 133-34.
Were the present statute read as it seemingly was intended, rents
deposited by the Association would be totally inaccessible to the lessor.
The precise terms of the present statute need not be interrelated,
however, since it impermissibly impairs the obligation of contracts even
if the restricted withdrawal privilege were available.
contrast, the legislative intent in Blaisdell was spelled out in the
statute, 290 U.S. at 416, and in the Women's Benefit Ass'n case, there
were reports of the emergency conditions to document the legislative
history and intended effect of the constitutional amendment at issue.
121 Fla. at 765-66,
164 So. at 858
(Buford, J., dissenting).
Fla.Stat. (1977) (emphasis supplied).
As the United States Supreme Court has observed:
severity of an impairment of contractual obligations can be measured by
the factors that reflect the high value the Framers placed on the
protection of private contracts. Contracts enable individuals to order
their personal and business affairs according to their particular needs
and interests. Once arranged, those rights and obligations are binding
under the law, and the parties are entitled to rely on them. Allied
Structural Steel Co. v. Spannaus, 438 U.S. 234, 245, 98 S. Ct. 2716, 2723,
57 L. Ed. 2d 727 (1978).
art. I, § 10, cl. 1; art. I, § 10, Fla.Const.